Why Tesla stock is in the green today even as Q2 deliveries slipped 13.5%

Tesla reported 384,122 vehicle deliveries in the second quarter of 2025, down 13.5% from the same period last year, marking the second consecutive quarterly decline.

Despite the year-over-year drop, shares rose as much as 5% following the release, as the figure slightly beat Wall Street expectations of around 387,000, according to FactSet.

However, at the time of writing, the TSLA stock had given up most of those gains, trading around 1% higher.

In the same quarter last year, Tesla had reported 443,956 deliveries and produced 410,831 vehicles.

For the latest quarter, production totalled 410,244 vehicles.

The company does not provide a breakdown of sales or production by region or model in its earnings releases.

However, Tesla disclosed that it produced 396,835 Model 3 and Model Y vehicles during the quarter and delivered 373,728 units of those two models combined.

In the first quarter of 2025, Tesla reported deliveries of 336,681 vehicles, a 13% drop from a year earlier.

Deliveries, which Tesla defines as vehicles transferred to customers with all paperwork completed, are the closest metric the company provides for actual sales.

The Trump-Musk feud 2.0

Shares of Tesla (TSLA) came under heavy pressure on Tuesday following a late-night social media post from President Donald Trump calling for a federal review of subsidies granted to Elon Musk’s companies.

The comments triggered an immediate reaction in the market, sending Tesla’s stock lower in premarket trading.

In a post on Truth Social, Trump alleged that Musk benefits from an unprecedented level of government support and claimed that without such subsidies, his businesses—ranging from electric vehicle production to rocket launches and satellite operations—“would likely cease,” potentially saving taxpayers a “FORTUNE.”

Trump also called on the Department of Government Efficiency, or “DOGE”—an agency Musk briefly led—to “take a good, hard look at this.”

Tesla and SpaceX have secured approximately $22.5 billion in government contracts since 2000, as per a Bloomberg report.

Musk’s relationship with President Donald Trump has deteriorated over the Tesla CEO's criticism of the administration’s sweeping tax-and-spending package.

Musk’s criticism comes amid growing concern within Tesla over certain provisions in the multitrillion-dollar legislation that could negatively impact its solar and battery operations.

Analysts at Energy Innovation estimate the bill’s measures could reduce annual US electric vehicle sales by roughly 100,000 units by 2035.

European sales pose another problem

Tesla’s vehicle sales in Europe fell for a fifth straight month in May, reinforcing the mounting pressure the company faces from lower-cost Chinese electric vehicle makers.

According to figures released Wednesday by the European Automobile Manufacturers Association (ACEA), Tesla sold 13,863 vehicles across the European Union, the UK, and the European Free Trade Association in May—a 27.9% drop from the same month last year.

The company’s regional market share declined to 1.2%, down from 1.8% in May 2024.

Meanwhile, Chinese EV manufacturers continued to expand their footprint despite the European Union’s imposition of new tariffs on Chinese imports.

Data from JATO Dynamics shows that Chinese automakers sold 65,808 vehicles in the region in May, more than doubling their market share to 5.9%.