Tesla has bucked industry trends by recording a second straight drop in sales amid a booming electric vehicle market.
The company reported on Wednesday that customer deliveries had fallen by 14 per cent in the second quarter of the year, marking the worst quarterly decline in Tesla’s history.
It followed a 13 per cent year-on-year dip in the first quarter of 2025 for the once all-conquering electric car maker, which has now lost its lead to Chinese rival BYD in terms of EV sales.
Market analyst Liz Lee, who serves as an associate director at Checkpoint Research, blames Tesla’s decline on a combination of increased competition and growing concerns over brand reputation.
Tesla CEO Elon Musk’s involvement in Donald Trump’s administration between late January and May resulted in protests and boycotts throughout the US and Europe, turning some potential and existing customers towards other brands.
“As a result, we expect Tesla’s global electric vehicle sales to decline by 10 per cent year-on-year in 2025,” she told The Independent, adding that she expected BYD to see customer deliveries continue to increase.
“We expect BYD’s global EV sales to grow by 45 per cent year-on-year in 2025, to reach a record high and significantly outpace most legacy peers.”
Trump and Musk’s relationship has broken down in recent weeks, though Musk’s continued support of far-right politicians in Europe continues to taint the company for many EV enthusiasts.
Tesla saw its sales plummet throughout Europe between January and March this year, with the UK offering the only sign of growth. This anomaly was addressed in April, as UK sales shot down by 62 per cent from the previous April.
BYD’s positive trajectory is more reflective of the broader market, with demand for electric vehicles hitting record highs in 2024.
Data from the International Energy Agency (IEA) and OurWorldinData show that global sales of combustion engine cars appear to have already peaked, with electric cars making up 22 per cent of all new cars sold worldwide in 2024.
This figure is up from just 2.6 per cent in 2019, with sales of non-electric cars decreasing by 20 per cent over that same five-year period.
Tesla’s falling sales have impacted profits, which were down 71 per cent in the first quarter of the year compared to the same period last year.
It was the third consecutive drop in net income for Tesla, tumbling from $3.3 billion in the first quarter of 2022, to $409 million in the first quarter of 2025.
The earnings for the second quarter are set to be announced on 23 July, though expectations are once again low following the dip in sales.
Musk’s allegiance with Trump saw Tesla’s share price collapse in the months following the US president’s inauguration, before a brief recovery after the tech billionaire left his role as the head of the Department of Government Efficiency (DOGE).
Poor sales figures, together with threats from Trump to cut incentives for electric cars, has seen the share price begin to slide again.
As Tesla’s largest shareholder, Musk’s wealth is intrinsically tied to the fortunes of the electric car company.
The world’s richest person has seen more than $100 billion wiped from his net worth in 2025, mirroring the trajectory of Tesla’s share price.
