Tesla's growth hits a snag as deliveries tumble 13% in second quarter

Tesla, the long-reigning king of the electric car world, has finally admitted it is navigating some choppy waters. The company announced its production and delivery numbers for the second quarter of 2025, revealing a big drop in vehicle deliveries and raising new questions about its path forward. The results show that the challenges faced in the first three months of the year were not a one-time blip, but part of a larger trend of slowing demand and mounting inventory.

For the period ending in June, Tesla delivered 384,122 electric vehicles to customers worldwide. This figure represents a steep 13% decline compared to the 444,000 cars it delivered in the same quarter of 2024. Wall Street analysts had braced for a downturn, with the consensus forecast hovering around 385,000 vehicles, a target the automaker narrowly missed. While the company ramped up production to 410,244 cars in the quarter, the disparity between cars built and cars sold means about 25,000 new Teslas have been added to its growing stockpile of unsold inventory.

The bulk of the company's business continues to rely on its two most popular vehicles, the Model 3 sedan and the Model Y SUV. Together, they accounted for 373,728 deliveries. The story for its other models, however, paints a more concerning picture. The "Other Models" category, a catch-all that includes the high-end Model S and Model X, the Tesla Semi, and the much-hyped Cybertruck, recorded only 10,394 deliveries from a production of 13,409 units. This grouping has seen its sales figures cut by more than half from its peak in 2024, when early Cybertruck orders were still being fulfilled.

The saga of the Cybertruck seems to be veering off-script. After planning for an annual production capacity of over a quarter-million units, current sales figures suggest a yearly rate of just 20,000. It's estimated that only about 5,000 Cybertrucks were delivered in the second quarter. To put that into perspective, Ford sold 5,842 of its F-150 Lightning electric pickups in the same period, and that was considered a 26% drop for them. With its combined sales of the Silverado EV, GMC Sierra EV, and Hummer EV pickup, General Motors also surpassed the Cybertruck's quarterly numbers.

Tesla had previously blamed a slow first quarter on production line changes for the refreshed Model Y. With factories now fully operational, that excuse no longer holds water. The reality is that despite an updated cash-cow model and incentives like the $7,500 federal tax credit for some vehicles, the demand is not keeping pace with production.

The automaker faces an aging vehicle lineup, increased competition from legacy carmakers and new EV startups, and a general cooling of the once-red-hot market for electric cars in the United States. Preliminary data suggests Tesla's US sales may have plummeted by as much as 20% in the quarter.

Unfortunately for Tesla, the road isn't getting smoother. Potential legislative changes at the federal level threaten to remove longstanding tax credits for electric cars and roll back efficiency regulations that have benefited Tesla. Unlike its legacy competitors, Tesla has no gasoline-powered vehicles to fall back on if the EV market continues to slow.

You would expect the market to react to bad news with the prices dropping, but the investors must see something we don't. The $2 billion worth of unsold vehicles clogging up parking lots across the country and falling sales don't seem to bother anyone. Or the Cyberflop that apparently 2 million people wanted to buy, with hardly anyone prepared to part with their cash when it came to buying one. But the "revolutionary" Robotaxi launch that's more of a storm in a teacup, and the upcoming army of robots that will take over boring, manufacturing jobs nobody wants, seem to have Tesla's devotees throwing money at it in buckets with the shares just going up.

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