Tesla's stock price rose early Wednesday despite a company report showing a decline in vehicle "deliveries," during its second quarter.
The positive stock move may have occurred because the company's report aligned with analysts' expectations, according to Sam Fiorani, the vice president of global vehicle forecasting at Auto Forecast Solutions.
The decline in vehicle deliveries, however, may be due — in part — to a wider range of options for buyers, Fiorani said.
"When Tesla started, they had no competition. So, anyone who wanted a cleaner vehicle – an electric vehicle – would gravitate to Tesla. Now, with so many players in the field, consumers have a choice of various, different models, different sizes, different types, different brands."
The numbers
The electric vehicle company's production and deliveries report, released July 2, revealed Tesla delivered 384,122 vehicles — mostly Models 3/Y — during the second quarter. That number is down 13.5% from the same quarter in 2024 when Tesla delivered 443,946 vehicles.
A "delivery" is when a vehicle is delivered to the customer at the showroom or their home, according to Tim Derdenger, an associate professor of marketing and strategy at Carnegie Mellon's Tepper School of Business.
"Initially Tesla's lower (sales and delivery) numbers were equated to the changeover of the new products," said Fiorani. "But the longer-term downturn is more of an issue with competition, with the market being saturated with electric vehicles."
Fiorani said it's possible some decline in sales may be attributable to consumer sentiment toward Tesla's CEO, Elon Musk, and his recent work as a special government employee working with the Trump administration's Department of Government Efficiency or DOGE.
"The larger protests that have come to Tesla dealers have to affect some of the sales," he said. "We can't say that it's a large-scale movement away from Tesla because of this, but it can't be denied that there is some issue with Tesla's sales and Elon Musk's political stance."
Lauren Fix, an automotive analyst for Car Coach Reports, said she believes the protests also encouraged Musk supporters to consider purchasing EVs.
"(Protesters) thought they were actually hurting Elon Musk...but what's interesting, it also caused people to purchase Teslas," she said.
"It may not have offset completely, but I think, overall, it caused a lot of people to rethink their current Teslas and sell them at a huge loss which is not good for the industry because you're basically flooding the used car market," Fix said.
She said Musk will always come up with new ideas.
Musk's company continues to shift and expand its focus to additional vehicle models including self-driving robotaxis.
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Outlook for Electric Vehicles
A massive proposed budget bill may eliminate current tax incentives for the purchase of an electric vehicle by this fall.
Currently, consumers may qualify for a credit of up to $7,500 for a new, qualified electric vehicle, or fuel cell electric vehicle or a smaller credit for the purchase of a used EV.
"Will that impact sales? Honestly, I don't think it will," said Fix. "Those people that love Teslas, no matter where you stand politically, are going to purchase Teslas."
Fix said the elimination of a tax incentive may mean a rush on electric cars before the end of September, however.
"If you want an electric car," she said, "Don't wait until the end of September, because it's going to be a big rush on electric cars — maybe not Tesla — but there will be a rush on electric cars because people are going to want to take advantage of that tax credit."
Looking forward, Fiorani said, manufacturers may adjust pricing to meet customers' needs when the tax incentive goes away.
"We're going to still see this demand for electric vehicles, and we're going to have to see adjustments in the price — whether that's an incentive from the manufacturer or a lower price overall," he said.
