Tesla’s U.S. sales slumped in the second quarter as mounting competition and signs of backlash against founder CEO Elon Musk chipped away at the electric vehicle maker’s lead in the segment.
Vehcle sales fell to 384,122 in April through June, a more than 13% drop from 443,956 in the same period last year. Sales of the company’s Models 3 and Y totaled 373,728, above the estimate of 356,000 from Wall Street analysts.
The decline comes amid renewed friction between Musk and President Trump this week, with the billionaire entrepreneur blasting the Republican tax and spending bill passed by the Senate on Tuesday.
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, and recently predicted a major turnaround in sales.
Tesla sales across Europe plummeted by almost 50% in April even as the broader market for electric cars saw growth in the region, according to data released by the European Automobile Manufacturers’ Association in May. At the same time, sales of battery-electric vehicles by all manufacturers rose about 28%, the group’s data shows.
Despite the sales slump, Wedbush analyst Dan Ives thinks Tesla is well-positioned for future growth, pointing to the company’s push into self-driving vehicles. Tesla in June started testing a “robotaxi” service in Austin, Texas, and is investing heavily in autonomous driving technology.
“Autonomous remains the biggest transformation to the auto industry in modern day history, and in our view Tesla will own the autonomous market in the U.S. with the initial launch of unsupervised [full self-driving] in Austin,” he said in a note to investors.
Tesla’s stock price rose $13, or 4%, to $309.30 in morning trade on Wednesday.
