Tesla sales fall for second straight quarter despite price cuts

Tesla experienced a drop in worldwide sales for the second consecutive quarter, even after lowering prices and offering attractive financing options. This is further evidence of a decline in demand for Tesla's products and electric vehicles in general.

The company based in Austin, Texas reported on Tuesday that it had sold 436,956 vehicles in the second quarter of the year, which was a decrease of 4.8% from the 466,140 vehicles sold during the same period last year. Despite the decline, the sales surpassed analyst expectations of 436,000 vehicles.

The global interest in electric vehicles is starting to decrease, but most car companies are still seeing growth in this industry. Tesla, despite having older models and higher prices compared to competitors, is facing more challenges.

Despite facing tough competition, Tesla maintained its position as the leading seller of electric vehicles globally. In the first six months of the year, Tesla achieved sales of over 910,000 vehicles, surpassing China's BYD, which sold 726,153 vehicles.

Tesla managed to sell more than 33,000 vehicles during the second quarter than it manufactured. This should help decrease the number of vehicles that the company has in stock at its stores.

Tesla did not provide a reason for the decrease in sales. They will release their second-quarter earnings on July 23rd. The drop in sales for the electric car company is happening at the same time as more competition is emerging from both established and new automakers who are looking to grab a piece of Tesla's market. Other car companies will be announcing their US sales numbers later on Tuesday.

Most of Tesla's sales were from the smaller and cheaper Model 3 and Model Y, while only 21,551 of their pricier models like the Model X, Model S, and the new Cybertruck were sold.

The decrease in sales happened even though Tesla reduced the prices of three out of its five models by $2,000 in the United States in April. The company lowered the prices of the Model Y, which is Tesla's most popular model and the best-selling electric car in the US, as well as the Models X and S. Additionally, during the quarter, Tesla decreased the price of its "Full Self Driving" system by about a third. It's important to note that this system does not fully drive the car on its own, so drivers must still be attentive and prepared to take over if necessary.

Jessica Caldwell, who leads the research team at Edmunds.com, mentioned that Tesla is facing challenges in a market where majority of early adopters already own electric vehicles, and regular consumers are doubtful if electric cars can fully cater to their needs.

Caldwell added that Tesla faces some challenges that make it stand out, such as a product lineup that hasn't changed much over the years. Due to price reductions by Tesla, the prices of pre-owned vehicles have decreased. As a result, individuals interested in purchasing a Tesla can find better deals on used vehicles. Caldwell noted that when considering monthly payments, it's difficult for other brands to match the affordability of purchasing a used Tesla.

Caldwell thinks there won't be any major events this year that will increase Tesla's sales unless gas prices suddenly rise. The Cybertruck is only being sold in limited quantities, and the other models are outdated. "It's difficult for most people to tell which models are newer and which are older," she explained.

Dan Ives, an analyst at Wedbush, told investors in a message on Tuesday that Tesla had a very impressive performance in the second quarter. He mentioned that the company has gotten past the worst of its troubles. Ives also noted that Tesla had to let go of 10% to 15% of its employees to save money and make sure they could still make a profit. He ended his message by saying that Tesla seems to be on a better path now as they start growing again.

In a note sent to shareholders in January, Tesla forecasted a significant decrease in sales growth for the year. Tesla's stock had dropped by over 40% at the beginning of the year.