Tesla surprises with better than expected car sales
Tesla's sales took a big drop earlier this year, but there are now indications that they may be starting to pick back up.
In the last three months, Elon Musk's company that makes electric cars, sent out almost 444,000 vehicles. This is a growth of over 14% compared to the previous quarter.
This exceeded the expectations of most analysts by a significant margin, although it still dipped by almost 5% compared to the same period in 2023.
Tesla is facing a decrease in demand as it struggles with high interest rates for loans and more competition.
The company has consistently lowered prices in an effort to attract more customers, and has also implemented affordable financing options.
However, it has not achieved much success in that area.
The company, which revealed intentions in April to lay off over 10% of its employees, has experienced a decline in sales during the first six months of the year.
At the beginning of the year, Tesla said that some of the reasons for their low performance were because they didn't have enough supplies due to problems with shipping in the Red Sea, and they also mentioned a fire at their factory in Germany.
However, experts suggest that Tesla must update its range of vehicles in order to prevent competitors from gaining market share.
The business began selling its cyber-truck last year, but this product accounts for only a small portion of its overall sales. The popular Model 3 sedan was introduced in 2017 and has been a main focus for the company.
Mr. Musk, who was recently approved by shareholders for a pay package of about $50 billion, has described a positive future for the company, supported by self-driving technology and automation.
Even though the auto industry is worried that the interest in electric cars has not been as strong in the US as they expected, the overall global market for electric vehicles is still expanding.
The International Energy Agency (IEA) predicts that over 20% of cars sold globally this year will be electric. In China, almost half of the cars sold will be electric, while in Europe, about a quarter will be electric.
Dan Ives, an analyst from Wedbush Securities, believed that Tesla had overcome its most challenging period. He highlighted progress in China, where the government's recent announcement of financial incentives for trading in older cars was expected to benefit the industry.
"It has been a tough time for Tesla and they have had to make some big cuts (around 10%-15%) to save money, but things are looking up now," he wrote in a message to investors on Tuesday.
He mentioned that he anticipated the company's upcoming August event on robotaxis would spark a fresh surge in growth.
The company's stock price surged over 6% during morning trading on Tuesday after the announcement.
