Tesla has reported a decline in vehicle sales for the second consecutive quarter, but not as severe as expected. This led to an increase in the stock price and secured the company the top position in the global electric vehicle market ahead of rival BYD.

The company announced that it delivered 443,956 vehicles worldwide over a period of three months, representing a decline of 4.8% compared to the same quarter of the previous year. This decline is due to weak demand and increasing competition.

Despite Tesla's slowdown in growth, the broader industry remains challenged. Other car manufacturers have launched numerous new electric models, but demand fell short of expectations despite falling prices and a flood of low-interest and leasing offers.

The better-than-expected results led to a 10% increase in Tesla's stock price on Tuesday. Prior to this news, Tesla's stock price had fallen by 16% this year.

Analysts Viewed the Decline in Production During the Quarter as Positive for Tesla, as Slowed Sales Had Led to an Increase in Unsold Vehicles. The Company Produced 410,831 Vehicles in This Period, a 14% Decrease Compared to the Previous Year.

CEO Elon Musk faces one of his biggest challenges in recent years as he has to spend money on developing new and more affordable models while simultaneously investing in costly bets on robots and self-driving technology.

Tesla, an Indicator for the Electric Vehicle Industry, Closely Monitored in Q2 for Signs of Recovery After a Poor Q1 Performance. In Q1, Tesla Recorded the First Year-over-Year Decline in Global Deliveries Since 2020, Partly Due to Production Halts.

The heading in English is:
"Tesla's vehicle fleet is aging, with the most popular model, the Model Y SUV, soon turning five years old - a point at which traditional automakers typically implement significant design changes to boost demand. The company is ramping up production of an updated Model 3 sedan and its latest model, the massive Cybertruck, which costs between $61,000 and $100,000.

Tesla faces some of its toughest competitors in China, where the company's sales have declined as competitors launch cheaper EV models. In June, Tesla's sales in China decreased by 24% compared to the previous year, while the broader market saw an increase in deliveries due to a flood of discounts and government subsidies.

The rival BYD recorded sales of 426,039 EVs in the second quarter, representing a 21% increase compared to the same period last year.

Musk has lowered the prices of Tesla vehicles as other major automakers bring many competing offers to the market. However, these price reductions also mean lower profits, and Tesla's once industry-leading operating margins were 5.5% in the first quarter of this year, compared to 16.8% in 2022. To support profits, Musk is cutting costs and has announced plans to lay off more than 10% of the company's global workforce.

Amid the turmoil, Musk has lost some long-standing employees, including former CFO Zach Kirkhorn and Drew Baglino, who oversaw much of the company's battery work.

Musk has tried to rally waning investor enthusiasm behind the company's bets on robotics and artificial intelligence, technologies that he said at Tesla’s annual shareholder meeting in June could boost Tesla’s market value by up to 30 trillion US dollars.

The company plans to spend $10 billion on artificial intelligence research this year and is expected to unveil an autonomous robotaxi in August. Musk also said Tesla would start limited production of its Optimus robot next year.

Nevertheless, the Tesla CEO must let profits flow to finance these bets. He said in April that the company plans to increase worldwide deliveries in 2024, but unlike in previous years, Musk has not set specific targets for this growth.

While Tesla still dominates EV sales in the US, the lead is shrinking. The company accounted for nearly half of all electric vehicles sold in the US in May, compared with about 60% of sales during the same period the previous year, according to data from Motor Intelligence.

Other major automakers also reported on US sales for the second quarter on Tuesday. General Motors reported that its sales for the period from April to June were roughly unchanged, while Toyota Motor recorded a 9% increase compared to the same quarter of the previous year. In the EV market, several automakers, including GM, reported healthy double-digit increases, but these sales still account for a small percentage of their overall business.

Analysts Expect Recent Cyberattack on Software Supplier CDK Global to Weigh on Quarterly Figures. Many dealers lost access to important software they use to run their businesses and had to try to complete transactions the old-fashioned way with pen and paper.

A CDK spokeswoman said on Tuesday that "almost all" of its dealer customers are back online.

Even before the hacking, US car sales for the first half of the year were expected to be roughly flat compared to the previous year, as the industry continues to struggle with high interest rates that increase monthly payments.

Electric vehicles are more affected by higher loan costs as they tend to be more expensive than their gasoline-powered counterparts.

Tesla is not the only manufacturer that has to navigate a stagnant EV market. Automakers from established giants like Ford Motor to start-ups like Rivian Automotive have warned of weak demand for electric vehicles in the U.S., as consumers have shown themselves to be less willing to give up their gasoline-powered cars.

Musk said he believes that millions more people would buy a Tesla if the vehicles were cheaper.

The company is also working on more affordable models that, according to Musk, are to be presented either later this year or early next year.

For most people, it's really not a question of whether they want a Tesla. They want a Tesla. They just don't have enough money to afford one," said Musk at a meeting with shareholders in June.