Sunita Somvanshi
Tesla is dealing with tough times in 2025. Their sales dropped 13% in the first half of the year, and their stock price sits about 20% lower than where it started in January, despite some recent gains.
The numbers paint a clear picture. Tesla built around 410,244 vehicles and delivered 384,122 in the second quarter of 2025, according to official company data. Their total revenue fell 12% compared to the same time last year, reaching $22.5 billion. The automotive revenue took an even bigger hit, down 16% – one of their worst quarterly performances in years.
China has become particularly problematic for Tesla. Vehicle insurance registrations there fell 26.4% in just one week between August 18-24. Market watchers think Tesla’s third-quarter sales in China will be challenging.
Analyst Ben Kallo maintains a “Hold” rating with a $320 price target. He worries about overly optimistic predictions and reduced revenue from regulatory credits, which declined sharply from $890 million to $439 million year-over-year.
The company’s once-strong customer loyalty has weakened considerably. In the U.S., customer loyalty dropped from 73% in June 2024 to 49.9% by March 2025, before climbing slightly to 57.4% in May. This decline happened as CEO Elon Musk became more politically active, turning some customers away. A movement called “Tesla Takedown” has gained steam, pushing for people to sell Tesla stock and stop buying their products in several countries.
Tesla has cut prices to deal with slower sales. They slashed lease prices in the UK by up to 40% to move cars off lots, according to multiple reports. In America, they raised Model S and X prices by $10,000 but bundled them with a “Luxe Package” that includes Full Self-Driving, lifetime Supercharging, Premium Connectivity, and a four-year premium service plan. Sales in the UK fell 60% in July, while first-quarter U.S. sales dropped 15% compared to 2024.
Adding to Tesla’s problems, the National Highway Traffic Safety Administration started looking into why Tesla delayed reporting crashes involving their self-driving and driver-assist features. Tesla says a data collection issue caused the delays and they’ve fixed it.
Meanwhile, Tesla continues pushing forward with plans for robotaxis, starting with tests using human safety monitors in Austin and planning to expand to the Bay Area. They want to start making Cybercabs in 2026. Musk described the latest Full Self-Driving software as “feeling alive” during recent remarks.
Tesla launched a new six-seat Model Y L in China, but Musk said this version “might not ever” come to American markets because they’re focusing on self-driving features instead. A cheaper Model Y-style vehicle should arrive in late 2025.
During second-quarter earnings discussions, Musk warned of a “weird transition period” and “rough quarters” ahead. “We probably could have a few rough quarters. I am not saying that we will, but we could,” Musk stated.
Despite these challenges, Tesla stock has shown some life recently, trading in the mid-$340s with day-to-day volatility. Some market watchers see potential for further gains based on robotaxi plans and new affordable models coming soon, though regulators continue to scrutinize autonomy features and permitting may be lengthy.Tesla produced and delivered fewer vehicles in the second quarter of 2025 compared to the same period in 2024. Their revenue decreased, with automotive sales taking the biggest hit. The company has lost customer loyalty in key markets and faces new competition from companies like BYD in China. Their stock price remains lower than at the start of 2025, though it has recovered somewhat in recent weeks.
