Tesla has reported a 13.5 percent drop in electric vehicle deliveries for Q2-2025, marking the second consecutive quarterly decline and reinforcing expectations that the company may face a full-year sales contraction. The EV giant delivered 384,122 electric vehicles in the quarter. Tesla has produced 410,244 vehicles during the second-quarter.
Tesla has delivered 373,728 units of Model 3/Y and 10,394 units of other models. It produced 396,835 units of Model 3/Y and 13,409 units of other models.
To avoid another annual sales decline, Tesla must deliver over one million electric vehicles in the second half of the year — a difficult target given economic uncertainty tied to tariffs and potential rollbacks of the $7,500 EV tax credit under the Donald Trump-backed tax overhaul.
Despite the shortfall, shares of Tesla rose 4.5 percent, reflecting relief among investors that results weren’t worse, Reuters news report said. Modest signs of demand recovery — particularly in China, where Tesla ended an eight-month sales slump thanks to a refreshed Model Y — helped soften the blow. The Model Y also saw increased traction in Norway and Spain, markets where political controversies had previously dented demand.
However, Tesla continues to feel pressure from Chinese rivals like BYD, which are offering feature-rich EVs at more competitive prices. The delayed launch of Tesla’s lower-cost model — expected to be a pared-down Model Y — has also hampered growth prospects.
Overall, while quarterly sales improved 14 percent sequentially from Q1, Tesla faces an uphill battle to reverse its downward trend without new product launches or major policy tailwinds.
Price trends
Tesla has recently adjusted pricing across its electric vehicle lineup, reflecting a mix of product upgrades, competitive pressures, and strategic positioning. In the United States, Tesla increased prices of its premium models — the Model S and Model X — by $5,000 in June 2025, aligning with updated features and minor design changes, Reuters news report said earlier.
At the same time, Tesla also raised the price of the Model 3 Long Range by around 3.6 percent, following improvements in driving range and efficiency. In contrast, the company is aggressively promoting lease offers on the updated Model Y, known internally as the “Juniper” version, with monthly payments starting at $399 for rear-wheel-drive and $499 for all-wheel-drive variants. These deals aim to maintain affordability and drive volume as consumer interest shifts.
In China, Tesla faces intensified pricing competition from domestic brands like BYD and new entrants such as Xiaomi. Xiaomi’s YU7 SUV, launched at a slightly lower price point than the Model Y, received hundreds of thousands of pre-orders within hours, undercutting Tesla’s position in the world’s largest EV market. While Tesla’s China-made vehicle sales showed modest recovery in June after months of decline, quarterly numbers still fell, signaling persistent demand challenges.
Tesla’s used vehicle market also reflects downward pressure, with average resale prices for Model Y and Model S falling between 8 percent and 14 percent year-over-year. However, the company’s new leasing strategies and updated models may help moderate depreciation, TopSpeed.com reports.
Looking ahead, Tesla is expected to introduce a lower-cost vehicle based on the Model Y platform, potentially priced under $30,000 after incentives. This move, combined with anticipated developments in Tesla’s robotaxi program, signals a shift toward broader accessibility and long-term volume growth.
Baburajan Kizhakedath