Tesla is struggling everywhere. Expect things to get worse.
Global Deliveries Plunge
The Wall Street Journal reports Tesla’s Global Vehicle Deliveries Plunged in Second Quarter
Tesla’s TSLA global vehicle sales fell 13.5% in the second quarter compared with a year ago, continuing a steep slide in automotive sales, as the company tries to pivot to autonomous vehicles.
The final quarterly tally of 384,122 Teslas delivered missed analysts’ expectations of 387,000 deliveries, according to FactSet.
The electric-vehicle maker has struggled to reverse months of declining sales, which analysts have in part attributed to consumer backlash against the brand and its Chief Executive Elon Musk, whose role in cutting government spending was polarizing. He stepped down from his federal role at the end of May.
Tesla has turned to vehicle updates and low-cost financing to try to drum up customer interest as it faces increased competition and pressure on its brand stemming from Musk’s stint in politics.
On June 22, Tesla rolled out its long-promised robotaxi service, opening up its new ride-hailing app to a small group of customers, including social-media influencers, who took rides in autonomously driven Tesla Model Ys through a limited area of Austin.
Though it started with fewer than 20 autonomous vehicles and a standardized fare of $4.20 per ride, Musk has said the program could one day add $5 trillion to $10 trillion to Tesla’s market cap.
To get there, Tesla needs to keep selling cars, which largely fund Tesla’s investments in AI and robotics.
Musk said he expects there to be hundreds of thousands of Teslas driving fully autonomously on roads in the U.S. by the end of 2026, many of which would be personally-owned vehicles. In his vision, drivers will one day be able to lease their cars to other riders on the robotaxi network, much like Uber or Airbnb.
Tesla’s share price has swung wildly in recent months. The stock nearly doubled in the weeks after President Trump’s election, sending its market capitalization to a high of $1.5 trillion in mid-December. In the weeks after the inauguration, the share returned to pre-election levels. By spring, it was back over $1 trillion.
Tesla’s June China-made EV sales see first rise in 9 months
Reuters reports Tesla’s June China-made EV sales see first rise in 9 months, but quarterly fall continues
Tesla’s (TSLA), opens new tab sales of its China-made electric vehicles edged up 0.8% in June from a year earlier, snapping an eight-month losing streak, but they continued to fall on a quarterly basis in the face of lower-cost new models from its Chinese rivals.
Deliveries of Model 3 and Model Y vehicles made in its Shanghai factory, including both China sales and exports to Europe and other markets, rose 16.1% from May to 71,599 units, data from the China Passenger Car Association showed on Wednesday.
By comparison, global car sales for BYD, Tesla’s biggest Chinese rival, increased 11% year-on-year to 377,628 units last month.
Sales of its China-made EVs in the April-June period slid 6.8% on-year, the third quarterly decline in a row.
Tesla’s China-made EVs accounted for 51.3% of its global deliveries in the first quarter.
Trump Megabill Axes $7,500 EV Tax Credit after September
CNBC reports Trump megabill axes $7,500 EV tax credit after September
A massive tax-and-spending package championed by President Donald Trump and passed by the Senate on Tuesday would end tax credits for electric vehicles within three months.
The legislation, which Republicans are trying to get to the president’s desk by July 4, would end tax breaks for consumers who buy or lease EVs after Sept. 30.
Lawmakers would eliminate a $7,500 tax credit for the purchase or lease of a new EV, and a $4,000 credit for the purchase of a used EV.
I cheer this part of the bill but not because of the Trump-Musk feud. Rather, I object to subsidies in general.
The Inflation Reduction Act, a landmark climate law signed by former President Joe Biden, offered the tax breaks for EVs through 2032.
Tesla makes a lot of money selling energy tax credits.
Musk now says he might support primary challenges against Republicans who support Trump’s “big, beautiful bill”
Up and Down Observations
I have two friends discussing Tesla. One notes that Tesla is down 35.5 percent from the all-time high.
The other notes Tesla is up 71.6 percent from the recent low at 214.25.
Both observations are accurate.
Normally, I like to make some observations on the technical position, but the chart is a mess.
However, the S&P 500 made a new high. Tesla did not come close. That is a key technical point.
Tesla is no longer a leader.
Fundamentally Speaking
- Tesla is now 100 percent dependent on Full-Self Driving (FSD).But Tesla lags Waymo badly.
- Tesla is very overpriced compared to BYD.
- Tesla sales in China are plunging rapidly. The year-over-year rise is based on very easy comps.
- BYD is competitive in Europe while Tesla skid.
- Trump is slowing down EV adoption and the One Big Beautiful Act is poised to kill energy credits. This has caused a major rift between Musk and Trump.
Looking Ahead
Reuters has the key number: Tesla’s China-made EVs accounted for 51.3% of its global deliveries in the first quarter.
I expect Tesla sales in China will plunge, profit margins will plunge or both.
Tesla’s models are dated and overpriced compared to BYD. And that does not factor in possible trade war repercussions.
Ultimately, China sales will trend towards zero. not hit zero. China got what it wanted out of the relationship. It no longer has any use for Tesla.
Musk Hype
Musk has said the program could one day add $5 trillion to $10 trillion to Tesla’s market cap.
Is Musk hype greater than Trump’s? I leave that to the reader but both are off the charts.
Robo-Taxi Nonsense
Musk said he expects there to be hundreds of thousands of Teslas driving fully autonomously on roads in the U.S. by the end of 2026, many of which would be personally-owned vehicles.
What Musk calls FSD is still only level 3 compared to Waymo’s level 4.
But assume it’s true. Are people really going to buy a Tesla just to rent it out like an Airbnb?
My answer is no. What would insurance cost on that?
Waymo Surges to 10 Million Paid Rides, Tesla Has Zero
Elon Musk has been promising Full Self Driving (FSD) for decades. He is now 10 million rides behind.
Waymo has far superior technology. Anyone who disagrees is a fool or a liar. But Musk is correct that Waymo is losing money on these rides.
For now, Waymo’s technology is far more expensive. But will that price differential be significant 10 years from now? 5? 3?
Waymo has a proven safety record. Tesla has nothing. And we still have serious doubts about Tesla in rain, snow, dust storms etc.
The Trump-Musk Feud Turns Very Ugly Including a Deportation Threat
Yesterday, I noted The Trump-Musk Feud Turns Very Ugly Including a Deportation Threat
Trump is not serious about deportation, but the feud is seriously ugly.
Musk has managed to offend the liberals and MAGA. That’s not exactly good for sales.
On June 1, I noted Waymo Surges to 10 Million Paid Rides, Tesla Has Zero
Hello Elon Musk, you are now 10 million rides behind Waymo.
Please click on the above link for details.
China’s EV Costs, Tech, and Quality “Far Superior” to the West
On June 30, I noted Ford CEO: China’s EV Costs, Tech, and Quality “Far Superior” to the West
Ford’s affordable EV project faces Chinese competitors with 20 years of experience and intense government backing.
If you are going to dispute the above article, I don’t want to hear about Ford’s CEO. Dispute what he said, and that’s very believable.
Finally, Waymo is losing money on every ride. But that is no indication that Tesla would turn a profit with the robo-taxi model.
Ignore the massive Musk hype.
I repeat my opening statement: Tesla is struggling everywhere. Expect things to get worse.
A local Lexus dealer is advertising 5k off MSRP for every new car.
Sorry, this isn’t just Tesla.
My father always said “the number 1 rule in business is “dont get political”. it is bad for business because you anger 50% or your customers” No one in the board rooms seem to understand that concept. Tesla is not the first.
There is a new small book store near my home. it’s in a eye sore building they remodeled creating a nice looking store. I’d like to go in and see what they have to offer. The only thing stopping me is the “Don’t Tread On Me” flag flying right outside the store front. No thanks, they will probably close as I’ve never seen a car in their parking lot. We live in a bright red East Tennessee small town. I imagine there are a limited number of book buyers here and they just turned away two. Guess you don’t have to be very smart or thoughtful to own a book store.
86/47
The fare of $4.20 is a marijuana reference to Musk’s drug use.
If Musk wants to save his wealth, image & company:
Musk has stacked the odds against himself by alienating his core constituency by becoming another trump sycophant. He actually thought he could bring change to the federal government and get rid of “useless” employees. Only to learn that most of them do their jobs and that their jobs are important to the public.
Lot’s to do!
As for #7, have you read officially where Tesla is working on SSBs? I haven’t. It’s as if they’ve hitched their next 5 years to the 4680 cell.
As for the federal employees, I agree but the word “most” doesn’t mean all. The federal workforce can be downsized by 10%. I believe about 2% have taken a buyout. I think the problem with DOGE’s first 60 days was the shotgun approach. Musk just the other day came out and agreed that his chainsaw oval office moment lacked empathy.
Why on earth idiot Trump didn’t come out on day one with a WARN act notice to every federal employee not under contract to make the layoffs legal is beyond understanding.
Regarding your #7 comment.
That is correct that Tesla is wed to their 4880 cell. Unfortunately, it is quickly becoming a dinosaur. BYD’s Blade battery is better by about 20% in real world driving conditions. That said the Solid State battery could be made under license from Quantum Scape and Tesla could perform their needed update and leapfrog BYD in terms on all five of the major metrics of EV performance. Tesla would have to build “Dry Rooms” in their battery factories and change their materials supply contracts as the battery chemistry changes to a significantly simpler matrix..
Regarding government employees? I also agree.
Regarding WARN Act? Who knows? It seems that his arrogance gets in the way a great deal of the time. Trumps brain sequence is “Fire, Ready, Aim”.
This is why he has to waffle so much and walk back so many statements.
The notion of deporting Musk because he opposes him politically? That is pure dictator mentality.
Sigh and off to some July 4 activities.
Enjoy All!
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I agree with nearly everything Mish opined on except one thing.
Waymo does not have a good safety record.
If a self driving car can be stopped by any moron placing safety cones in its path then it is not safe. As the recent torching of multiple Waymos in LA riots showed the self driving car is a death trap in riots. Do you think that nobody will start robbing passengers in these cars once the usual low life’s realise how easy it is to stop these cars and demand passengers open up and hand over their valuables or else be torched?
I want a car that will safely drive itself but also want the ability to grab the wheel and accelerate around low life’s (or drive over them).
And if I do buy an electric car in a few years I want a $10,000 basic BYD with a battery that lasts 3000 cycles, not a $40000 Tesla with a battery that won’t last a decade.
Slightly off topic but did Buffett make a wise decision to invest in BYD and if so is it the least risky of all the EV companies to invest a small amount into?
No one mentions without the EV credits and subsidies Tesla won’t even be profitable.. most of their income comes from Stellantis Ford or GM that paid Tesla hefty $$$$ to offset the zero carbon BS narratives… Let’s face it.. average looking cars … Darn ugly truck.. super expensive and now going extinct.. bye Tesla we will miss u .. not
BTW .. WeRide the china based robotaxis firm.. all functional and growing worldwide is barely making 10 millions in sales… So .. NO… there’s no money to be made in robotaxis business… Look at airline industry .. and Tesla car is not a 🚌 bus but an individual cheap ride that adds to traffic.. cost and drama… Wake up people Tesla is anything but innovative . 10 yrs 3 models?.. nothing but a big hype pump and hopium
By 2030 Tesla will be selling as many cars as Simca.
https://en.wikipedia.org/wiki/Simca_1000
Tesla should start licensing Solid State battery technology from Quantum Scape and leapfrog its competition. Modify his factories with the required dry rooms for building solid state batteries! Tesla has a great charging network and Musk can simply apologize to his core constituency and publicly state that his association with Trump is over and that Trump manipulated him like so many others.
Think how Trump screwed Giuliani!
I can’t wait to see Vance’s fall from grace. He is so far out of his league its funny!
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I believe you have to understand, what Tesla is first. In essence, Tesla is not just an automaker but a vertically integrated technology company with a mission to revolutionize energy, transportation, and automation. Its diverse portfolio reflects a strategy to leverage synergies between AI, renewable energy, and advanced manufacturing to address global challenges like climate change and labor efficiency.
Well, that’s their goal. They had a good thing going with the cars and flushed it, though, which makes me a bit dubious about the aspirational parts you mention.
Musk threw his core constituency away when he joined forces with getting Trump elected. Being a trump sycophant is a recipe for getting screwed!
Trump used Musk just as he is using our nation for his personal gratification and building wealth.
As regards Musks Space X:
NASA just went ahead with a test firing of a booster for the heavy lift that was nearly a cancelled program as a signal that money will flow back to NASA instead of Space X.
Musk is screwed in so many ways he may go the way of the Tucker.
Epic FAIL!
Plus, VW group now has QS’s Solid State batteries for their EV’s and will leapfrog Tesla.
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To his credit, Musk tried to purge the government of waste and has stayed true to that principle whereas Trump capitulated to more deficit spending as far as the eye can see.
I’d prefer Musk to trump any day!
Musk is a man with a vision to build!
Trump is a man with a mission to take advantage of the gullible.
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You do know you can’t say “climate change” around the Trump administration?
If Musk had even breathed that phrase at the WH, he woulda been chucked out the door.
… run by a drug fueled, narcissistic whackaloon.
Actually, Tesla should have been developing them 5 years ago
Again, if they don’t have a SSB skunk works going, then they deserve to go bankrupt.
Elon tried the seemingly most direct Trump-interfacing tactic (to stay on the federal subsidy perks train): get physically close, ingratiate yourself, stay around, and especially, throw money. But Trump can be nonlinear toward anybody. Watching those two specific personalities fall helplessly (given their traits) into a spiral of mutual invective was my best bit of schadenfreude-tinged laughter so far this year. And it sure has spilled over into Elon’s business.
Elon seems to have missed the small detail of the dislocation of his Tesla constituencies: alienating everyone while walking a plank to nowhere. Customers aren’t minions (despite his legions of drooling fans)! It is one thing to believe his vaporware promises, another more problematic thing perhaps, to buy a Tesla at this moment.
On a tangent from that, I am wondering though, whether Trump is still on the China warpath, or what is going on there? The five-minute attention span is hard to keep up with!
I’m disappointed. If Elon wouldn’t have cheaped out, he could have paid to sock puppet trump for the rest of his term. It would have been absolutely hilarious.
Looks like Thiel got Vance at a bargain price, comparatively. Now to see where trump falls on the actuarial tables….
Even Trump and all the people around him know the US stands no chance in a war with China. All theyd have to do is stop sending those ships of cheap goods to us that our economy is addicted to and we’d go into major withdrawal.
Tesla isn’t going to disappear anytime soon, but they are becoming less relevant in the EV industry. Their sales have declined to roughly 10% of global EV sales (half of what it was in Q1 2024), a trend unlikely to reverse. They are being out-innovated by the competition and need the robotaxi to be a big success in order to regain some traction. Though, like Mish, I personally don’t expect robotaxi to see the level of success needed.
I don’t think the global taxi/ride hailing market is even very profitable. They’re going to have to compete against Uber drivers making minimum wage and cleaning/detailing their cars for free.
Agree
Raises a question when Joe Drunk orders up a Waymo/Tesla Taxi for a ride home from the bar does the barf in the back seat get cleaned up before the vehicle is sent out for the next ride? I guess you are under constant video surveillance in one of these taxis.
Good, facists have no business in the car business.
Agreed but also: You know who founded Volkswagen right? It’s kind of in the name.
Mister Volks of course.
I cant handle all this winning American science to soon face its largest brain drain in history
https://bigthink.com/starts-with-a-bang/american-science-brain-drain/
We don’t need no fancy pants ivory tower eggheads in this county… ship ’em out!
US has been gaining brain drain for many decades especially after WW2.
This is the reverse brain drain happening but it will be minimal compared to gain.
Tesla dragged the Mag 7 down. AMD cannibalized NVDA. The AI trillionaires imitate each other. Musk third party might suck senators from both parties and W.VA Manchin. US10Y-US3M = 4.28 – 4.35 < zero, inverted.
Thanks for mentioning the “robotaxi” insurance issue. None of the Tesla fanboys has ever explained to me who will insure these cars when they are (ostensibly) driving around on autopilot and picking up random passengers in god knows what condition or frame of mind. Apart from any potential software issue!
Musk promised his delusional fans “1 million robotaxis next year” … er, about 4 years ago. And the share price dutifully shot up.
Trump should deport him for all his endless fraudulent bullshit. But by that measure Trump should deport himself. What a pathetic country.
Maybe similar to how Waymo insures, and from what I’ve read, Waymo is expensive, so I dont see how lots of ordinary people could afford to use these things regularly.
Tesla is at $315 today. We will see if Mish has got it right or not. Let’s come back in three months and see where it is then. I believe he is wrong on the stock.
Without significant change across all sorts of areas from leadership, marketing, R&D, I don’t think Tesla is going to be relevant in the US BEV market in about 5 years. Kia, Hyundai, GM & even Ford will continue to steal away Tesla’s US market share.
In addition, maybe I missed an announcement, but I have no idea if Tesla is working or partnering on a solid-state battery. Their 4680 is a great battery, but it’s not going to dominate BEVs in another 3-4 years.
Without a major Model 2 announcement, Tesla’s sales will continue in a tailspin.
Just my $0.02.
Unfortunately for them Tesla is the only one with high positive margins and a strong balance sheet amount the EVs. BYD has zero margins and its accounting is suspect. The others still are losing money with each EV sold and their margins on hybrids are half those of ICE. Their EV sales have plunged also. It’s a problem with the sector more than a problem with Tesla. The robotaxis is just starting and Optimus is very promising. Mish loves Waymo and comes up with negative posts on Teams periodically.
I’m not concerned about BYD. They’re a Chinese company trying to gobble up market share. Of course, their price war is starting to backfire. In addition, they won’t be selling cars in the US anytime soon.
And, I’m not concerned about Tesla’s self-driving cars, Optimus or even their solar play.
I’m simply pointing out that they missed a great opportunity to sell hybrids which are going to be around for many more years.
It’s one of the best examples of how Tesla failed to execute on understanding what the American consumer wanted from the entirety of the electric car market, including hybrids. It’s called range anxiety for a reason, and Tesla wasn’t the only one. We can also blame Brandon in this regard.
The same can be said about GM, when they killed off the Volt. All of these people are a bunch of idiots. In fact, a Volt like car might have been what Tesla really should have done as a hedge against what is now a clear lack of charging infrastructure. And for better or worse, Trump isn’t going to be doing the BEV market any favors.
Oh and I forgot that Ford recently announced they’re pivoting to Hybrids.
My dad’s Ford Maverick gets 45 MPG which is ludicrous for a truck that will do everything a regular family would need a truck for.
And I’m going to laugh my ass off as Tesla, GM, Apple and other’s market share in China continue to tank. Breaking News everyone, China has stolen all the IP they needed from you, so you might as well get out of the market & go find profits somewhere else. China is NOT your friend, when it comes to selling your products.
China and Chinese companies look out for China’s interests, as far as I can tell. American corporations, regardless where they are located, only look out for the next quarterly report.
IMHO, Tesla was CRAZY to not have introduced a hybrid back by 2020.
Running down the BEV only gauntlet was just idiotic.
They could have easily produced an affordable hybrid with 50 miles of range, and it would have vastly increased their marketability.
Then they would have been just another car company. Hybrids are just a transitional car. Why they should do is make a loss priced model. The robotaxi is a good start for one.
Toyota isn’t losing money on its Prius. Hybrids are going to be around for a long time. Tesla lost out on 5 years into adding to its profit margins because, again, it’s got a punch of engineers running the company into the ground.
Low priced I meant.
I’m on my second Prius, I love the car. On the interstate at 70/80 MPG I still get 45 MPG if I slow just a little MPG is over 50 MPG. Although I’ve noticed bucking a very strong wind can reduce that MPG to 42 of so.
For a large number of drivers I don’t think price is the main objection to Tesla. I think the main problem is range and the fact that they fear running out of charge where there is no charging stations. Price may take a back seat to range anxiety.
The performance of the stock has been pretty much completely disconnected from the performance of the company for quite a while now. It’s anyone’s guess what it will be going forward.
I’m looking forward to it reconnecting.
While I respect Musk’s considerable accomplishments, he’s still an idiot in my book.
How can Tesla have a market cap higher than all the other car makers in the world combined when BYD is eating its lunch?
Musk deserves everything he’s getting. And I say this not because he hung his hat on DOGE / Trump, but because he should have rolled out the Model 2 two years ago. And he shouldn’t have built the vanity CyberTruck.
It appears that Tesla has the worst marketing department of any company on earth.
Correct. Realistically Tesla peaked in 2020 when the Model Y was released. That’s the last time something was released that anyone wanted in any kind of quantities.
I expect that at some point in the future (say 10-20 years time) historians will credit Tesla/Musk for getting EV’s into mainstream consciousness while lamenting that the company ultimately went under due to not being able to continue their success for a variety of reasons (Musk, legacy car makers/China caught up and passed them, cyber truck/robo taxi/self driving failure etc)
I don’t think they’re going under.
I just think they’ve got to start building EVs the masses want & can afford.
They can’t stay at the higher end of the BEV market.
Realistically, Musk needs to step down as CEO of Tesla & focus on SpaceX. That’s where America really needs him, helping to keep America ahead of China in the space race.
The company needs a real CEO and not a bunch of engineers running the company.
Why can’t they stay at the higher end of the BEV market? That’s what the original Tesla models were (original Roadster and Model X). Very high end cars marketed as status symbols with very high profit margins. Gradually they introduced lower priced models until they were (and are currently) in the the luxury auto market (BMW/Audi/Mercedes etc) which still has decent profit margins but not high volume sales (Audi/BMW are good equivalents).
Somewhere along the line the stock price went to the moon until Telsa was more valuable than all the other car makers combined and so of course they had to keep promising even lower priced and quality models which of course have lower profit margins (now we taking about the Toyota Corollas and low end Ford/GM cars). But other than to sell huge volumes of cars (to justify a stock price), why would Tesla need to enter that market? BWM/Audi do just fine in the market they are in without needing to produce cars for the masses. If stock price wasn’t a consideration they’d do better to remain as a status symbol and stay in the luxury auto market.
BTW, a real CEO instead of a bunch of Engineers is why Intel got into trouble…
Take it to the bank, dude. Tesla is DOOMED if they don’t change their product mix in a very big way.
As for the high-end, until three months ago, Tesla owned the EV space in the US. Once BMW, Audi, Mercedes et al get their BEVs perfected, that’s a crap ton more competitors for Elon to deal with.
In addition, Elon has alienated a very large portion of its customers who won’t be buying Tesla’s in the future. They need a much wider product mix, pricing & a damn truck that everyone will drool over.
And like I said, they haven’t even announced a solid-state battery yet which is crazy. Maybe they’ve been doing a Skunk Works.
Time will tell.
I agree with you in that I believe they are doomed. My first post mentioned that I expect that to happen in 10-20 years time when historians look back at the birth of EV adoption.
It’s happened to countless companies (think Netscape in browsers, AOL in online internet services, Nokia in cell phones). The first company to create mass adoption isn’t always the big winner.
High end buyers are liberals and they all now hate Musk. They’d rather drive a Rivian.
They can be glad “truth in advertising” died years ago. Musk has made more public lies about his cars than any other CEO of a car manufacturer, ever.
About every month I start up my ~ 1990 Coleman Powermate 4000 W portable gasoline generator.