What’s going on here?
Tesla’s deliveries are projected to decline for the second straight quarter – a first in the company’s history.
What does this mean?
Tesla is expected to deliver 438,019 vehicles in the June quarter, a 3.7% decline due to fierce competition in China and a consumer shift towards hybrids. Demand for Tesla’s new models has been weak, with delays in affordable electric cars adding strain. Elon Musk’s focus on robotaxis has investors worried about the readiness of its autonomous tech. Sales in Europe also suffered, with a notable 36% drop in May, partly due to reduced EV subsidies and declining interest from fleet operators.
Why should I care?
For markets: Tesla’s uphill battle.
Tesla’s stock has lost a quarter of its value this year, despite optimistic forecasts in April. Barclays analyst Dan Levy predicts an 11% drop in second-quarter deliveries, highlighting a tough environment. Delays in new models and increased competition from cheaper hybrids are pressing Tesla to adopt aggressive pricing and financing strategies.
The bigger picture: A shift in Tesla’s vision.
Tesla’s omission of its ambitious goal of delivering 20 million vehicles annually by 2030 from its latest impact report suggests a shift in strategy. The focus is now on robotaxis and autonomous tech, with plans to unveil them on August 8. However, sparse production details and concerns about its ‘Full Self-Driving’ software signal significant changes in Tesla’s long-term goals.
