Tesla Deliveries Drop Most in History. Why the Stock Is Up.

Second-quarter deliveries fell 13.5% from a year earlier. (Katherine KY Cheng/Getty Images)

Tesla delivered 384,122 cars in the second quarter, down 13.5% from the 444,000 delivered in the second quarter of 2024 but very close to the Wall Street consensus estimate of about 386,000 vehicles.

It was the worst quarterly decline in the company’s history. Still, the result was better than feared and up from the 337,000 delivered in the first quarter of 2025. The latest analysts’ estimates heading into the report were in the range of 355,000 vehicles.

Tesla stock jumped 5% on Wednesday to $315.65, while the S&P 500 rose 0.5% and the Dow Jones Industrial Average finished flat.

“Fireworks come early for Tesla,” wrote Wedbush analyst Dan Ives, calling the results better than feared.

That is how William Blair analyst Jed Dorsheimer characterized the number, too. He rates shares Buy but doesn’t have a target for the price. Ives rates Tesla stock Buy and has a $500 price target for shares.

Investors were braced for bad news. Most of the intra-quarter sales data weren’t good. Tesla’s sales in Europe fell about 37% year over year in April and May combined. Tesla’s quarterly sales in China, based on weekly numbers tracked by Citi analyst Jeff Chung, declined more than 10% year over year.

Tesla’s sales growth has been affected by a few things. Elon Musk’s position in the Trump administration turned off some core buyers, politically left-leaning people looking to go green. Tesla management acknowledged brand challenges during Tesla’s first-quarter earnings conference call in April. Trade tensions between China and the U.S. also had some Chinese car buyers avoiding American-made products, according to Wall Street analysts.

All that means the second-quarter numbers were a relief. Still, estimates for the second quarter of 2025 started at about 500,000 vehicles. They started to drop precipitously after first-quarter deliveries fell 13% year over year, missing Wall Street estimates by some 40,000 vehicles.

Until the second quarter, that result was the worst year-over-year decline since the company introduced the Model S sedan in 2012.

Tesla stock should have a good day on Wednesday, considering the starting point. Coming into the trading session, Tesla stock had fallen for six consecutive days, losing almost 14% over that span.

The path of Tesla shares, however, is notoriously difficult to project on a short-term basis. The stock rose 5.3% after the company reported disappointing first-quarter deliveries, partly because of news that CEO Elon Musk would be spending less time in Washington and more time at Tesla.

Musk at Tesla is a big deal for investors. If he “continues to lead and remain in the driver’s seat, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle,” Ives wrote.

Tesla recently updated its best-selling car, the Model Y crossover vehicle. Updates can lead to some sales weakness while buyers wait for the newer version.

With deliveries in the books, second-quarter earnings will arrive in a few weeks, on July 23. Wall Street currently expects earnings per share of 44 cents, according to FactSet, down from the 52 cents reported in the second quarter of 2024. At the start of 2025, Wall Street expected second-quarter EPS of 85 cents.

A solid delivery result likely means there won’t be many more adjustments to the second-quarter EPS forecast.

Aside from earnings, Tesla produced 410,244 vehicles in the quarter, meaning it increased its inventory. That will affect cash flow and could affect pricing in the coming months.

Tesla also delivered 9.6 gigawatt hours of energy storage in the quarter, up from 9.4 gigawatt hours in the second quarter of 2024, but down from 10.4 gigawatt hours in the first quarter. After cars, stationary storage is Tesla’s next-largest business.

Along with earnings, Tesla investors will expect an update on the company’s next model, which is due any day now. “We’re still planning to release models this year,” said Lars Moravy, vice president of vehicle engineering at Tesla, during the company’s first-quarter earnings conference call.

Details of the new model, however, have been thin. Investors are hoping that it will be enough to reinvigorate sales growth.

Write to Al Root at allen.root@dowjones.com