Tesla’s Q2 deliveries are projected to fall more than 11% year-over-year. With demand soft in China and Europe and inventory piling up, the numbers suggest this isn’t a dip, it’s the start of a deeper slowdown.
Tesla (TSLA) is staring down yet another delivery drop, and this one could hit hard. Early estimates suggest Q2 deliveries will land near 394,000 vehicles, down 11% year-over-year. Q1 already saw a 13% drop.
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If that number holds, it won’t be a one-off miss, it will mark the second consecutive quarter of double-digit delivery declines. That kind of back-to-back drop signals a deeper issue with demand, not just seasonal weakness or temporary supply chain noise. It’s a clear sign that Tesla is losing momentum, and the slowdown is accelerating.
Tesla’s International Sales Are Cracking
Tesla’s two biggest markets outside the U.S. are cracking.
In Europe, deliveries fell off a cliff, down 28% in May, making it the fifth straight month of red. That’s not seasonal. That’s real market share loss. Tesla is getting squeezed on both ends — legacy players like VW (VWAGY) and BMW (DE:BMW) reclaiming ground, and Chinese EVs like BYD (BYDDF) and NIO (NIO) punching in from the bottom.
China’s no safer. Despite price cuts and domestic perks, Tesla deliveries dropped 15% in May, with a total 18% slide between January and May. Consumers are shifting. Locals are picking homegrown brands with better value and more aggressive tech rollouts. Tesla’s pricing edge is evaporating.
Political Backlash Squeezes Demand
The most unpredictable and polarizing factor in Tesla’s performance right now is Elon Musk himself.
Musk’s political leanings are now more than noise, they’re business factors. His growing alignment with right-wing U.S. and European voices has alienated the progressive base that once drove EV adoption. And the fallout is showing in the numbers.
UK Tesla sales fell 45% in May, and European market share slipped to 1.2%, down from 1.8%. This indicates that consumer sentiment is turning cold.
Robotaxi Hype Clashes with Core Business Weakness
Tesla’s robotaxi prototypes have been the center of the company’s public narrative this year. A slick rollout in Austin grabbed attention, but not enough to distract from a weak core business. The EV delivery engine is stalling.
Production for Q2 is strong, around 434,000 vehicles, but if only 355,000 to 394,000 are delivered. That gap raises red flags. Tesla could be sitting on excess inventory while demand stalls out. And every unsold unit chips away at margin.
Robotaxi hype might keep Wall Street entertained, but it’s not moving units yet. And until it does, the gap between vision and revenue is getting harder to ignore.
What to Watch When Numbers Drop
The number everyone’s waiting on is simple: how far do deliveries fall? An 11% drop would match the low end of expectations. Anything worse, and Tesla risks a full-blown sentiment reversal.
Production vs. deliveries is the second red flag. If Q2 sees another big production surplus, it’s confirmation that Tesla’s demand engine isn’t firing. And if inventory piles up, expect margin compression to get worse, especially with ongoing price cuts in play.
Finally, keep your eye on the roadmap. A cheaper Model Y variant or a firm date on the robotaxi rollout could shift sentiment. But without that clarity, Tesla is left defending its stock price with fewer tools — while rivals keep gaining ground.
Is Tesla a Buy, Sell, or Hold?
Wall Street isn’t unified on Tesla right now, far from it. According to 35 analysts tracked by TipRanks, the stock carries a Hold rating overall, with a split of 14 Buys, 12 Holds, and nine Sells. That’s a market divided, and nervous.
