Elon Musk’s Tesla saw its sales rise 10% in the second quarter, benefiting from government incentives and price cuts that made electric cars cheaper than comparable petrol models.
Tesla delivered 466,000 vehicles from April to June, up from 423,000 in the previous quarter, the company said Sunday. Sales in the second quarter rose 83% year-over-year as the company expanded production at new plants near Austin, Texas and Berlin.
A rule that went into effect this year allows Tesla car buyers to get a $7,500 federal tax credit. With this credit, the cheapest Model 3 sedan sells for less than $33,000, comparable to mass-market cars such as the Toyota Camry and Honda Accord, and similar luxury sedans sold by gasoline-powered Mercedes-Benz and BMW. cheaper than
Electric vehicle owners also benefit from fuel savings and reduced maintenance costs. Electric cars never need oil changes and generally cost less per mile than gas.
Tesla is the leading electric-car maker in the U.S., with a 62% market share in the first quarter, according to Kerry Blue Book. But that share is down from more than 70% in early 2022, as established automakers such as General Motors, Ford Motor and Volkswagen have started offering more electric models.
In China, a bigger auto market than the U.S. or Europe, Tesla faces stiff competition from local makers such as BYD with newer model lines. According to consulting firm AlixPartners, Chinese makers’ electric vehicles have been in showrooms for just over a year on average. Tesla’s most popular car, the Model Y Sport Utility Vehicle, was launched in his 2020.
Citing consumer research, AlixPartners noted that Chinese manufacturers also offer interior and exterior styling, entertainment and information systems that better cater to local tastes.
Tesla’s sales continue to rise, but the company’s profitability has suffered as it has had to cut prices to support demand. Tesla’s first-quarter profit was $2.5 billion, down from $3.7 billion in the final three months of 2022.
Many investors expect Tesla’s growth to accelerate as demand for electric vehicles rises and Tesla launches its Cybertruck electric pickup truck later this year. Tesla’s agreement to allow other automakers such as Ford and GM to use its charging network could also bring in new revenue streams.
Tesla’s stock has more than doubled this year, but it’s still well below its 2021 peak, when the company was valued above $1 trillion.
The automaker said on Sunday that it will release its financial results for the second quarter of this year on July 19.
