Tesla loses ground in Q2 as competitors' EV sales surge

Tesla’s quarterly deliveries report reflected declines in both production and sales but came in above analyst forecasts, causing the company’s shares to surge around 10% following the release.

By the numbers

• Tesla delivered 443,956 vehicles and built 410,831 between April and June. The two numbers represent respective declines of roughly 4.8% and 14.4% compared to last year.

• The data also reflects a substantive improvement over the previous quarter, which saw an annual drop of 8.5% in terms of deliveries, although production came in slightly lower.

• Analyst estimates ranged widely, but most expected deliveries to fall around 6% to 9%.

A closer look

• Tesla’s shares rallied after the report, indicating relief among shareholders who felt pessimistic after the first quarter, which denoted the company’s first year-over-year deliveries decline since 2020. At the same time, the EV maker is far from being in the clear.

• While Tesla did outperform the last quarter, it failed to reverse the annual decline in demand. These trends would be less troubling if they didn’t conflict with the experiences of other electric car makers. In its own quarterly report, Kia posted a 125% increase in fully electric sales compared to last year. Its parent company, Hyundai, reported a 33% surge in EV purchases for the first six months of the year, although this includes hybrids.

The true culprit: This sheds light on Tesla’s real weakness: declining market share. Today, the company controls a little more than 50% of the U.S. EV sector (globally, it occupies just under 20%), when it used to control over 80% in 2020. This is due to increased competition with legacy automakers, many of whom have pushed through new releases at a rapid rate. These fresh products have served to capture the attention of consumers, including former Tesla buyers who haven’t seen a new model in several years.

Bottom line: Tesla did conclude the second quarter on a high note, despite the challenges that remain. But as the year continues, it will need to address the issues that are causing buyers to look to flood to competing brands. Otherwise, it runs the risk of falling below 50% market share in the near future.

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 66,000 others now, it's free:

Revolutionize your dealership marketing game with Stream Companies, a tech-enabled, full-service ad agency specializing in digital, creative, and automotive retail strategy. They’re the hands-on, data driven team that excels in doing the ordinary extraordinarily well.

• Experience the power of cutting-edge, patented ad-tech-enabled solutions that drive tangible results.

• From digital advertising to creative campaigns, they've got you covered.

Boasting an impressive squad of experts and industry specialists, their team of 600+ employees are dedicated to taking your brand to new heights. Stream works with some of the biggest and best dealerships in the country and serves all OEMs.

Ready to elevate your brand? Visit StreamCompanies.com to explore their comprehensive services and success stories. Embrace innovation with Stream Companies and kickstart your journey to extraordinary marketing by booking your business a free audit today—do it right here!