Tesla has posted its largest-ever year-on-year drop in quarterly sales, with global deliveries falling 13.5% in the second quarter of 2025 compared to the same period last year.

The electric vehicle (EV) manufacturer delivered 384,122 cars during the quarter—nearly 60,000 fewer than a year earlier. While the figure represents a 14.1% improvement from Q1, it still marks the second consecutive quarterly decline and underscores the mounting pressure on the company.

Despite the slump, Tesla shares opened nearly 4% higher on Wednesday, beating some analysts’ expectations of a steeper drop.

The decline comes amid growing brand damage linked to CEO Elon Musk’s political activities, particularly his high-profile role within the Trump administration. The backlash has included protests at Tesla showrooms in the US and Europe, as well as vandalism of Tesla vehicles and facilities. Registration data suggests that regional sales in both markets have taken a hit, even as the broader EV sector continues to grow.

Tesla is also facing intensified competition, especially from Chinese automakers. Rival BYD announced on Wednesday it had sold 1 million electric vehicles in the first half of 2025, significantly outpacing Tesla’s year-to-date sales of approximately 721,000 and positioning BYD to overtake Tesla as the world’s top EV seller.

Tesla’s recent performance marks a departure from its historical trajectory of consistent year-on-year growth, which helped propel it to become the world’s most valuable automaker despite lower overall volumes than legacy car manufacturers. Until 2024, the company had recorded just one quarterly sales drop—in 2020, due to pandemic-related disruptions.

Investors have endured volatile swings in Tesla’s share price over the past year. Shares surged in the wake of Trump’s election victory in late 2024 but fell more than 50% by April this year amid concerns over Musk’s political involvement. A partial rebound followed Musk’s April announcement that he would step back from his government role to refocus on Tesla, along with excitement over the company’s long-awaited robotaxi rollout.

Shares have recovered around 35% from their April low through to Tuesday’s close, but the company now faces renewed scrutiny as it battles to stabilise growth and defend its market leadership.