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Tesla posted another big drop in quarterly deliveries on Wednesday, putting it on course for its second straight annual sales decline as demand falters due to backlash over CEO Elon Musk’s political stance and an aging vehicle lineup.
Still, shares of the electric automaker jumped 3% as the decline proved less severe than the bleakest analyst projections.
Tesla said it delivered 384,122 vehicles in the second quarter, down 13.5% from 443,956 units a year ago.
Analysts expected it to report deliveries of about 394,378 vehicles, according to an average of 23 estimates from Visible Alpha, though projections went to as low as 360,080 units based on estimates from 10 analysts over the past month.
“The market is reacting to the deliveries not being as bad as potentially thought with multiple analysts cutting their forecasts over the past week,” said Seth Goldstein, senior equity analyst at Morningstar.
The stock has lost 25% of its value so far this year as investors feared brand damage in Europe and US from Musk’s embrace of right-wing politics and his role in spearheading the Trump administration’s cost-cutting effort.
Tesla’s plummeting deliveries in a steadily growing global EV market come despite Musk saying in April that sales had turned around.
The company refreshed its top-selling Model Y crossover earlier this year to boost demand, but the redesign forced a production halt and prompted some buyers to delay purchases in anticipation of the updated version.
Most of Tesla’s revenue and profit come from its core EV business and much of its trillion-dollar valuation hangs on Musk’s big bet on turning its vehicles into robotaxis.
Tesla last month rolled out a robotaxi service in limited parts of Austin, Texas, for a select group of invitees and with several restrictions, including having a safety monitor in the front passenger seat.
The automaker had said it would start producing a cheaper vehicle — expected to be pared-down Model Y by June end. Reuters had reported in April it was delayed by at least a few months.
While a cheaper model might help bolster sales, Wall Street expects a second consecutive annual sales decline this year.
To achieve Musk’s target of returning to growth this year, Tesla would need to hand over more than a million units in the second half – a record and a tough challenge, according to analysts, despite typically stronger sales in the second half.
