4 takeaways from Tesla's latest sales report

• Wall Street doesn't appear spooked by Tesla's 13.5% year-over-year decline in vehicle deliveries.
• While the numbers were below analysts' average estimates, they came in above some of the lowest predictions.
• The decline means that Tesla would need to deliver over a million vehicles in the second half of 2025 to return to growth.

Tesla just experienced its steepest drop in quarterly vehicle deliveries to date, but you wouldn't know it looking at its stock price.

Wall Street appears to believe that the numbers could've been worse, and the stock was up 4.86% at market close on Wednesday.

The electric automaker delivered about 384,000 EVs in the second quarter, marking a 13.5% decrease from the 444,000 vehicles it delivered in the same period of 2024.

The new report comes after a challenging first quarter for Tesla's vehicle deliveries, which the company attributed to an assembly line overhaul for the refreshed Model Y and anti-Tesla sentiment in certain markets. The two rough quarters also follow Tesla's first annual delivery decline in 2024.

The automaker is facing multiple challenges, including a slowing EV environment, rising competition, the looming removal of consumer EV tax credits, and potential brand damage tied to Elon Musk's political stint.

Despite the latest setback, Wall Street doesn't appear spooked by the numbers. Analysts explained why.

1. The numbers are bad, but not that bad

Tesla's delivery report fell in line with analysts' average estimates, and the numbers were better than the most pessimistic of Wall Street forecasts.

"We consider the release a modest disappointment, although vehicle sales weren't as weak as many had feared," CFRA analyst Garrett Nelson wrote in an analyst note on Wednesday.

On average, analysts expected 389,400 vehicles delivered in the second quarter, according to data compiled by Bloomberg. However, some forecasts, like RBC Capital Markets, were as low as 366,000, and Tesla landed about 5% above that, with 384,000 deliveries.

Thomas Monteiro, senior analyst at Investing.com, told BI that given the automaker's aging lineup, increasing competition, and political competition, Tesla showed its ability to stay relevant, which in and of itself could be viewed as a win for the automaker.

Tesla bull Dan Ives told BI that "Rome wasn't built in a day," and he expects the automaker to take six to nine months to come back from its recent challenges, like the Model Y assembly line changeover.

Monteiro said that if this is "the bottom for Tesla," the struggles of late 2024 and early 2025 could turn out to be a "temporary setback in the company's broader trajectory."

2. Tesla has a steep hill to climb

After back-to-back quarters of declining sales, Tesla is looking to return to growth.

The trouble is, the bigger the deliveries miss, the steeper the hill it has to climb to get there.

In the first half of the year, Tesla delivered a total of roughly 720,700 EVs. To exceed its 2024 deliveries of 1,789,226 vehicles, Tesla would need to deliver well over a million EVs across the next two quarters.

It's possible, but an ambitious feat for the EV maker. In the third quarter last year, Tesla delivered 462,890 vehicles, and in the fourth quarter, it hit about 495,000.

A more affordable model could spur sales, but Tesla hasn't given an updated timeline for its cheaper EV, which it had previously said was on track to begin production in the first half of the year.

3. The stock is up

Tesla stock popped immediately following the results and ended the day up over 4.8%.

In addition to staying above the lowest of Wall Street's estimates, another factor could also be China's Passenger Car Association releasing data indicating Tesla saw its first increase in 2025 vehicle deliveries from its Shanghai factory, a key production plant for global exports.

In June, Tesla delivered 71,599 units from the factory, marking a 0.8% year-over-year increase and a 16% monthly increase, according to the data. That could indicate a bright spot for Tesla's China growth prospects, a market where the automaker is facing increasing competition and just lost its top manufacturing executive.

4. Tesla isn't out of the woods

Not all analysts had an optimistic take on Tesla's numbers.

Gadjo Sevilla, a senior tech and AI analyst for EMARKETER, a sister company to BI, said that Tesla's headwinds contributed to the sales decline and the automaker may be "stretching itself thin" with the robotaxi rollout and Optimus humanoid robot development. Those projects "divert time, talent, and resources from EVs," Sevilla said.

Musk has said that solving autonomy and developing related technology that utilizes the technology, such as Optimus, are key to Tesla's future growth.

"Increased EV competition, especially in growth markets like China, and the continued slowdown in global EV adoption will continue to compound Tesla's losses," Sevilla said.

While Musk has returned his focus to Tesla, his favorability has taken a hit from many on both the political right and the left, according to recent polls. Shortly after leaving his position in DOGE, the billionaire sparked an ongoing public feud with President Donald Trump regarding his Big Beautiful Bill. As the two take turns exchanging insults on social media, Tesla has seen sharp swings in its share price.