After some major gains, Tesla appears to be on a downward sales slide thanks to a relatively aging lineup and stiffer competition.
Update July 2, 2024: Tesla published its sales results on July 2. The company delivered 443,956 vehicles — slightly higher than some analysts predicted, but still down 4.75% on the 466,140 vehicles it delivered in Q2 2023. Year-to-date, Tesla’s sales are down 6.55% on the first six months of 2023. The automaker delivered 889,015 vehicles between January 1 and June 30, 2023; while it delivered 830,766 vehicles between January 1 and June 30, 2024.
It’s July 1, and that means we’re going to see the deluge of second-quarter 2024 sales roll out over the coming days. Even before the official numbers drop, however, analysts are calling for another weak sales period for EV maker Tesla Inc. There could be several reasons for the potential decline, whether it’s down to the actual products, moves and statements by CEO Elon Musk or the general state of the electric car landscape itself (which, in a large sense, is tied directly to how Tesla performs as the dominant force in the market). Nevertheless, a 5.4% drop in Q2 to approximately 441,000 vehicles — the first time the company’s posted two consecutive quarterly sales losses since 2012 — signals a tough climate to continue the explosive growth some have come to expect over the past few years.
Per Bloomberg:
Tesla has turned the page on several of the issues that contributed to its struggles early this year, including a suspected arson attack at its factory near Berlin and shipping diversions related to conflict in the Red Sea. That leaves the company with few excuses for its sales slowdown aside from a relatively straightforward problem: Tesla’s older lineup of vehicles is having a harder time keeping up with fresher offerings from rival EV manufacturers.
While the refreshed Model 3 and the out-there Cybertruck are making their way out to customers, the updated Model Y is still several months off. What’s more, the Model S and Model X have gone several years without a major overhaul outside frequent software updates. The new Roadster still hasn’t materialized for customers to actually buy.
Tesla also faces headwinds including several recalls on the Cybertruck, which finally hit the market in greater numbers this year, some five years after it made its initial debut. The company also slashed more than 10% of its global staff in April, aiming to curb costs. That undoubtedly helped save cash in the short-term, but cuts to the company’s sales staff may have slowed down the deliveries of vehicles to customers, just like cooling demand may have factored into weaker-than-expected quarterly results.
Despite the lower volume, though, Tesla’s stock has picked up nearly 20% in the past month, largely on Musk’s hype for the company’s Robotaxi reveal on August 8. Humanoid robots are also part of the outfit’s upcoming plans, while he also promised new models as soon as this year (Musk said on Twitter/X that the Model Y refresh isn’t coming this year, however).
Shareholders also voted to re-approve Musk’s $56 billion compensation package last month — a move that exhibits shareholders’ confidence as they shift their outlook more toward what’s coming (the Robotaxi) rather than Tesla’s performance here-and-now.
