Tesla sales slump again: can cheaper models spark a major comeback?

Electric carmaker Tesla just announced another disappointing quarter, delivering 384,122 cars worldwide between April and June. That’s down 13.5% from the same period last year and puts the company on course for a second straight year of falling sales.

It’s a stark contrast to the glory days when Tesla was smashing delivery records and talking up 50% annual growth. Now, after back-to-back declines in the first half of 2025, those big ambitions are starting to look a bit out of reach.

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So, what’s going on?

For starters, demand for electric cars isn’t quite what it used to be, even for Tesla which is arguably the most recognisable EV brand. After years of strong growth, things seem to be cooling off. Last year, Tesla sold 1.79 million cars worldwide, which is a bit less than the 1.81 million they delivered in 2023. This year? It might be even lower.

The refreshed Model Y, Tesla’s top-selling car, was supposed to boost sales, but it looks like it hasn’t really made a big difference. Tesla hasn’t shared exact sales numbers by model or region, but industry experts say the updated SUV probably isn’t the hit Tesla was hoping for. In fact, analysts at JATO Dynamics have pointed out that Tesla’s sales in Europe actually dropped by 11% in 2024, after a big 56% jump in 2023.

And although you can’t buy it in the UK, the Cybertruck – Musk’s futuristic, stainless-steel beast – continues to divide opinion and hasn’t sparked much of a sales boom in the US either. Tesla had big plans to make over 250,000 Cybertrucks a year, but right now they’re only selling about 20,000 a year.

Musk, politics, and public pushback

Then there’s Elon Musk himself. Since taking on a role in US President Donald Trump’s administration across the pond, he’s attracted a wave of negative press and public backlash, including anti-Tesla protests in the US.

Musk recently let go of one of his top executives and has reportedly promised to spend more time focusing on Tesla again. In the meantime, the company has launched a limited version of its long-awaited Robotaxi service in Austin, Texas – but it’s still early days.

Policy challenges and a shaky future

Beyond Musk’s antics, there are bigger challenges on the horizon. A sweeping new law in the US just scrapped key incentives for buying electric vehicles, including tax breaks and funding for charging infrastructure. That could make EVs less attractive to American buyers. That’s a big problem for Tesla, which only makes electric cars.

Here in the UK, EV adoption is still ticking along, but signs of hesitation are starting to show. Rising insurance costs, patchy charging infrastructure, and high prices for new electric cars haven’t helped. The UK car industry is calling for the government to boost EV incentives to drive uptake.

Tesla, for its part, has already slashed prices, offered cheap finance deals, and made small upgrades to its full range. But none of that has been enough to reverse the sales slide so far.

Can a cheaper Tesla save the brand?

Tesla’s next big move could be crucial. For months, the company has been teasing new “more affordable” models which are rumoured to be stripped-down versions of the Model Y and Model 3. Originally, those were meant to start production in early 2025. Whether they’ve actually done that remains to be seen.

An affordable Tesla – something closer to £25,000 – could be a game-changer, especially here in the UK where electric car buyers are crying out for budget-friendly options with decent range. This move could also mean stepping up to compete with Chinese EV makers such as BYD, who are really gaining ground in UK sales.

But until those new models hit the road, Tesla’s stuck between a rock and a hard place: falling sales, political distractions, and a fast-changing EV market. We’ll find out more on 23 July when Tesla reveals its full quarterly earnings, which will possibly give us a clearer look at what’s next.

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