Tesla exceeds expectations as its EV sales start to rebound

Tuesday’s sales numbers mark a “comeback performance” from Tesla after a disastrous first quarter, Wedbush Securities analyst Dan Ives said.

“After what’s been a very choppy six months, the mojo is back in the Tesla story,” he said.

There was a consensus view that Tesla would miss Wall Street analysts’ estimates, Ives added, making the second-quarter sales “surprising to even the most bullish investors.” Company observers had been weighing the effects of high interest rates and weaker consumer sentiment about electric vehicles.

Tesla has been facing a softening electric-vehicle market. Sales of electric vehicles are still growing faster than gasoline vehicles, but Tesla and other carmakers have had to offer discounts and incentives over the past year in an attempt to attract a broader market beyond early EV adopters.

Before this year, Tesla had reported an annual sales decline in only one other quarter, at the height of pandemic lockdowns in 2020. Tuesday’s report marks the first time the company has seen annual sales decline in back-to-back quarters, but the company had hinted at the trend earlier — during a January earnings call, chief executive Elon Musk said Tesla would experience a “notably lower growth rate” this year as the company invests in a next-generation vehicle it plans to start building in 2025.

In April, the company said it delivered 387,000 vehicles, down more than 20 percent from the previous quarter and an 8.5 percent drop year-over-year. That same month, Tesla reported a 9 percent decline in annual revenue for the first quarter.

Automakers competing with Tesla in the EV market saw stronger quarterly sales results.

General Motors on Tuesday said it sold 696,000 vehicles during the quarter, a year-over-year increase of 0.6 percent and the company’s best quarterly sales result in more than three years. GM’s EV deliveries rose 40 percent from a year earlier.

EV and hybrid sales also fueled success for Toyota. The company sold more than 247,000 electrified vehicles in the second quarter, representing 40 percent of the period’s total deliveries and a 63 percent year-over-year increase. Across all vehicle types, Toyota reported 622,000 sold in the quarter, a 9 percent annual increase.