Is Tesla In Trouble? Sales Fall For Second Straight Quarter Despite Price Cuts | Auto News

The company said on Tuesday that it sold 443,956 vehicles from April through June, down 4.8% from 466,140 sold in the same period a year ago. But the sales were better than the 436,000 that analysts had expected. 

Is Tesla In Trouble?

The better-than-expected deliveries pushed Tesla’s stock up 10% on Tuesday. The stock is down about 7% so far this year, but it has nearly erased larger losses from prior months. 

Tesla shares had been down more than 40% earlier in the year, but are up more than 60% since hitting a 52-week low in April. Demand for EVs worldwide is slowing, but they’re still growing for most automakers. 

Tesla, with an aging model lineup and relatively high average selling prices, has struggled more than other manufacturers. Still, it retained the title of the world’s top-selling electric vehicle maker.

World’s Top-Selling EV Maker

For the first half of the year, Tesla sold 830,766 electric vehicles worldwide, handily beating China’s BYD, which sold 726,153 EVs. Tesla also sold over 33,000 more vehicles during the second quarter than it produced, which should reduce the company’s inventory on hand at its stores. 

Tesla gave no explanation for the sales decline. Nearly, all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 21,551 of its more expensive models that include X and S, as well as the new Cybertruck.

Sales Decline Despite Price Cuts

The sales decline came despite Tesla knocking $2,000 off the prices of three of its five models in the United States in April. The company cut the prices of the Model Y, Tesla’s most popular model and the top-selling electric vehicle in the U.S., and also of the Models X and S.

The April cuts reduced the starting price for a Model Y to $42,990 and to $72,990 for a Model S and $77,990 for a Model X. Last week, Tesla lopped $2,340 off the $38,990 base price of some newly revamped Model 3s that were in the inventory shipped to its stores. 

In addition, Tesla in May offered 0.99% financing for up to six years on the Model Y. In June, it offered interest as low as 1.99% for three years on the rear-wheel-drive Model 3. Typical new-vehicle interest rates average just over 7%, according to Edmunds.com.