Tesla reported another record plunge in sales Wednesday, as brand damage from CEO Elon Musk’s political activities and increased competition continued to batter the once fast-growing electric car maker.
Tesla reported it sold 384,122 cars in the quarter, down nearly 60,000 cars, or 13.5% from the sales total a year ago. That marks the largest year-over-year drop in sales in the company’s history. However, that number is up 14.1% from its first quarter total.
Despite the drop in sales, shares of Tesla (TSLA) opened up nearly 4% Wednesday trading following the report. That’s because it exceeded some analyst forecasts for a much larger drop in sales.
Musk’s political activities, especially his previous role in the Trump administration, has prompted widespread protests at Tesla showrooms across the United States and Europe, along with some instances of vandalism against its vehicles and facilities. The company does not break down its sales by region, but registration data has suggested that US and European sales have fallen sharply.
The company also faces increased competition in the electric vehicle market (EV), not just from legacy Western automakers, but also from Chinese automakers. The latter has hurt Tesla’s sales in China, the largest market for both EV and auto sales. China has long been the second largest market for Tesla sales behind the United States.
Notably, Tesla is poised to lose its title for the world’s largest EV maker to Chinese automaker BYD, even though BYD has not entered the US market itself. While BYD has had some quarters of greater EV sales, Tesla has always managed to come out on top when it comes to annual sales. But this year,BYD is on course to blow past Tesla’s yearly EV sales.
Earlier on Wednesday, BYD reported it had sold 1 million pure EV vehicles in the first half of this year, putting it far ahead of Tesla’s year-to-date total of sales of about 721,000.
This is a developing story. It will be updated.