Sales of Tesla electric cars fell sharply in the last three months as boycotts over Elon Musk’s political views continue to keep buyers away, a significant development given expectations that anger with the company’s billionaire CEO would have faded by now.

The company reported a 13% plunge in sales on Wednesday in a sign that Musk’s embrace of U.S. President Donald Trump and far-right politicians in Europe has had a deep and enduring impact on Tesla’s brand appeal. The new figures show rival electric-vehicle makers have wasted no time to pounce on the company’s weakness to steal market share and suggest Tesla’s quarterly earnings report later this month could also disappoint.

Sales fell to 384,122 in April through June, down from 443,956 in the same three months last year. During the latest period, Musk formally left the Trump administration as a cost-cutting czar, and hopes rose that sales would recover. Musk himself recently said that Tesla was in the midst of a “major rebound” in sales.

Still, some parts of the report were encouraging. Sales of the Models 3 and Y totaled 373,728, above the estimate of 356,000 from Wall Street analysts. Tesla shares rose 3.7% in morning trading.

“The numbers weren’t as bad as thought with all the analyst forecast cuts we saw over the past week,” said Morningstar’s Seth Goldstein, though he added the report overall showed the company faces big challenges. “The current product lineup is at market saturation and Tesla will need the new affordable vehicle to grow deliveries.”

Musk has promised a cheaper EV model would be coming this year that would boost sales.

It’s not clear yet if Musk’s latest feud with Trump will help lure back buyers who have been angry at the billionaire’s political positions. After Musk once again took to social media to criticize Trump’s budget bill, the president threatened Tuesday to use the power of his office to hurt his companies, including Tesla, pushing its stock down more than 5%.

The new figures come as Tesla is focusing less on new models and more on robots, self-driving technology and robotaxis ferrying passengers around without anyone behind the wheel.

Tesla is in the midst of a test run of robotaxis in Austin, Texas, that seems to have gone smoothly for the most part. But it also has drawn the scrutiny of federal car safety regulators because of a few mishaps, including one case in which a Tesla cab was shown on a video heading down an opposing lane.

The competition from rival EV makers is especially fierce in Europe where China’s BYD has taken a bite out of its market share. Tesla sales fell 28% in May in 30 European countries even as the overall market for electric vehicles expanded sharply, according to the European Automobile Manufacturers’ Association.

Musk has acknowledged that his work as head of the Department of Government Efficiency and his embrace of European far-right candidates have hurt the company. But he attributed much of the sales plunge to customers holding off while they waited for new versions of Tesla’s best selling Model Y.

Tesla reports second quarter financial result on July 23. In the first quarter, net income fell 71%.

Tesla (TSLA, Financials) is expected to report another dip in vehicle deliveries Wednesday; analysts forecast 394,380 units for the second quarter down 11% from a year ago.

The slide follows a 13% drop in Q1; hopes that a refreshed Model Y would lift demand didn’t pan out. It’s not such a departure from the old Model Y, said investor Ross Gerber; buyers didn’t bite.

Sales in Europe have now fallen five months in a row down nearly 28% in May; in China, Tesla’s market share has slipped to 7.6% from 10% last year, and well off its 2020 peak of 15%.

Analysts expect full-year sales to fall 8%; Musk had promised 20%30% growth, then walked that back. To meet even flat growth, Tesla would need to deliver over a million vehicles in the second half a tall order.

Politics aren’t helping; Musk’s public alignment with far-right figures and his role in U.S. job cuts have turned off some buyers. Others are simply choosing cheaper Chinese EVs with flashier features.

Tesla has rolled out a handful of robotaxis in Austin and is working on a lower-priced Model Y; but delays and competition especially from Xiaomi make the road ahead steeper.

The TESLA logo is seen outside a dealership in the Brooklyn borough of New York City, U.S., April 26, 2021. REUTERS/Shannon Stapleton/File Photo Purchase Licensing Rights , opens new tab

Companies Tesla Inc Follow

July 7 (Reuters) – Tesla (TSLA.O) , opens new tab shares fell nearly 7% in premarket trading on Monday after CEO Elon Musk’s plans to launch a new U.S. political party raised investor doubts about his focus on the electric automaker’s future.

The former head of the Department of Government Efficiency (DOGE) unveiled the ‘America Party’ on Saturday, voicing his displeasure over President Donald Trump’s ‘One Big, Beautiful Bill’.

Sign up here.

This further escalates Musk’s feud with Trump even as Tesla posted a second straight drop in quarterly deliveries. Their discord over the tax bill erupted into an all-out social media brawl in early June, with Trump threatening to cut Musk’s government contracts and subsidies.

“Investors are worried about two things – one is more Trump ire affecting subsidies and the other, more importantly, is a distracted Musk,” said Neil Wilson, UK investor strategist at Saxo Markets.

Investors had in May cheered Musk’s decision to scale back political spending and remain Tesla CEO for another five years. He had spent nearly $300 million around Trump’s re-election campaign last year.

“But now (they) are worried he’s going to (get) sucked back in and take his eye off Tesla,” Wilson said.

The first signs of investor unease surfaced soon after Musk’s announcement, with investment firm Azoria Partners delaying the listing of a Tesla exchange-traded fund.

Trump on Sunday called Musk’s plans to form the “America Party” ” ridiculous “, saying the Musk ally he once named to lead NASA would have presented a conflict of interest given Musk’s business interests in space.

TESLA BOARD MOVES

Wedbush analyst Dan Ives, a Tesla bull, said many investors are feeling a “sense of exhaustion” over Musk’s insistence on immersing himself in politics.

Azoria Partners CEO James Fishback posted several critical comments on X about Musk’s new party, and called for the Tesla board to clarify Musk’s political ambitions and evaluate if his political involvement is compatible with his obligations to Tesla as CEO.

The new party undermines the confidence shareholders had that Musk would be focusing more on the company, Fishback said.

Musk’s latest political move raises questions around Tesla board’s course of action. Its Chair Robyn Denholm in May denied a Wall Street Journal report that said board members were looking to replace the CEO.

Tesla’s board, which has been criticized for failing to provide oversight of its combative, headline-making CEO, faces a dilemma managing him as he oversees five other companies and his personal political ambitions.

“This is exactly the kind of thing a board of directors would curtail – removing the CEO if he refused to curtail these kinds of activities,” said Ann Lipton, a professor at the University of Colorado Law School and an expert in business law.

“The Tesla board has been fairly supine; they have not, at least not in any demonstrable way, taken any action to force Musk to limit his outside ventures, and it’s difficult to imagine they would begin now.”

Tensions with Trump, struggling sales and an aging vehicle line-up have hurt Tesla’s stock, even as the company bets on growth from autonomous vehicles.

The stock, which soared to over $488 in December after Trump’s November re-election, has lost 35% since then and closed last week at $315.35.

Tesla is the worst performing stock among “the Magnificent Seven” group of high-growth U.S. companies this year.

Reporting by Joel Jose and Arsheeya Bajwa in Bengaluru and Amanda Cooper in London; additional reporting by Medha Singh; Editing by Saumyadeb Chakrabarty and Arun Koyyur

Our Standards: The Thomson Reuters Trust Principles. , opens new tab

This article has been reviewed according to Science X’s editorial process and policies . Editors have highlighted the following attributes while ensuring the content’s credibility:

Tesla reported lower auto sales again in the second quarter as CEO Elon Musk’s political activism weighs on the company.

Tesla reported another hefty drop in auto sales Wednesday, extending a difficult period amid intensifying electric vehicle competition and backlash over CEO Elon Musk’s political activities.

The EV maker reported 384,122 deliveries in the second quarter, down 13.5% from the year-ago period. Shares rallied after the disclosure, which was better than some leading forecasts in recent days.

The sales figures, which are global, reflect the more contested nature of the EV market, which Tesla once dominated, but which now also features BYD and other low-cost Chinese companies, as well as legacy western automakers like General Motors, Toyota and Volkswagen.

But Musk’s political activism on behalf of right-wing figures has also made the company a target of boycotts and demonstrations, weighing on sales.

In recent days, Musk has revived a feud with US President Donald Trump, dragging Tesla shares lower on Tuesday.

The figures portend another poor round of earnings when Tesla reports results on July 23. Analysts currently project a drop of 16% to $1.2 billion in profits, according to S&P Capital IQ.

Tesla has faced questions about a lack of new retail auto products to wow consumers after Musk’s futuristic Cybertruck proved polarizing.

Analysts will be looking for an update on the state of new offerings after Tesla said in April that it planned “more affordable models” in the first half of 2025.

The company has begun deliveries of its revamped Model Y in some markets, according to news reports.

Tesla launched a long-discussed robotaxi venture in the Texas state capital Austin, lending momentum to Musk’s branding of the company as at the forefront of autonomous and artificial intelligence technology.

But reports that the self-driving cars have driven recklessly have prompted oversight from US regulators.

Heading into Wednesday’s data release, notes from JPMorgan Chase and Deutsche Bank had forecast bigger drops in second-quarter deliveries, citing poor figures in Europe in particular.

The JPMorgan note was especially bearish, setting a December share price target of $115, down more than 60% from current levels and citing an expected drag from the elimination of US tax credits for EVs under Trump’s signature domestic policy legislation moving through Congress.

Following the results, Morningstar said in a note that Tesla would not see “meaningful deliveries growth without a new lower-cost vehicle aimed at the affordable market.”

For the second quarter in a row, Tesla produced more vehicles than it delivered, “raising concerns regarding demand and inventory levels,” said a note from CFRA Research that called the figures “a modest disappointment.”

But Wedbush’s Dan Ives said Wednesday’s “better-than-feared” report set the stage for growth.

“If Musk continues to lead and remain in the driver’s seat, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle,” Ives said.

Political wildcard

A wildcard remains: how Musk’s shifting relationship with Trump could affect Tesla.

Musk donated more than $270 million to Trump’s presidential campaign, barnstorming key battleground states for the Republican.

After the election, he oversaw the launch of the Department of Government Efficiency, a controversial initiative that eliminated thousands of government jobs deemed by DOGE to be part of a pattern of waste, fraud and abuse.

But Musk has broken with Trump over the White House’s flagship tax and spending bill, which Musk has called “utterly insane and destructive.”

In response, Trump has threatened to target Musk’s business empire and warned of deporting the South African-born billionaire, sending Tesla shares plummeting.

“This high-profile feud introduces political risk,” Briefing.com said in a note Tuesday.

“The personal nature of the conflict, amplified by Trump’s comments implying Tesla’s reliance on subsidies for survival, has sparked fears of broader policy shifts targeting Musk’s business empire.”

Tesla shares rose 4.7% early Wednesday.

© 2025 AFP

US Stock Market Highlights: S&P 500 closes lower as Tesla shares tumble, traders weigh Trump-Xi talk

By CNBCTV18.COM Jun 6, 2025 1:46 AM IST (Updated)

US Stock Market Highlights: The S&P 500 slipped 0.53% on Thursday (June 5) to close at 5,939.30, weighed down by a sharp decline in Tesla shares. The Nasdaq Composite dropped 0.83% to finish at 19,298.45, while the Dow Jones Industrial Average shed 108 points, or 0.25%, ending at 42,319.74. Tesla was the biggest drag on the session, plunging more than 14% and falling below its trillion-dollar market cap.

US Stock Market Highlights: The S&P 500 slipped 0.53% on Thursday (June 5) to close at 5,939.30, weighed down by a sharp decline in Tesla shares. The Nasdaq Composite dropped 0.83% to finish at 19,298.45, while the Dow Jones Industrial Average shed 108 points, or 0.25%, ending at 42,319.74. Tesla was the biggest drag on the session, plunging more than 14% and falling below its trillion-dollar market cap. The drop came after former President Donald Trump said he was “very disappointed” with CEO Elon Musk, hinting at the possibility of cutting government contracts with Musk-led companies. Musk responded on X, claiming that “without me, Trump would have lost the election,” escalating the public spat.

Watch this space for all the live updates.