Tesla on Thursday reported record-setting second-quarter delivery numbers that smashed past Wall Street estimates, in a possible sign that damage from a customer revolt over Elon Musk and boycotts is mostly behind it.
The electric vehicle maker run by Musk reported Thursday that it delivered 480,126 cars to customers, a jump of 25% over the 384,122 figure a year ago when many Europeans refused to buy his cars because of his embrace of far-right political candidates there.
The April-June sales, the second straight quarterly gain in a row, also came in much higher than the 401,000 that Wall Street analysts had been expecting, according to a FactSet survey.
Tesla produced 451,758 vehicles during the quarter. The deliveries exceeded production by more than 28,000 vehicles, leading the company to draw down inventory that it built up during the first quarter.
It's a big turnaround from just a few months ago when Tesla reported sales had fallen in 2025 for a second year in a row and it had to yield its crown as the world's largest EV maker to China's BYD.
Strong results offer a crucial cushion as Musk focuses on expensive ambitions in autonomous driving and artificial intelligence, the main drivers of the company's roughly $1.6 trillion valuation.
Shares of the Austin, Texas-based company fell sharply in midday trading Thursday, down about 7%, an odd development that Seth Goldstein of Morningstar attributed possibly to profit-taking by investors after a recent run-up in its shares.
For the second-quarter figures, the company didn't break out results by country, but an earlier report from trade groups reported big sales increases in Europe in May, including a 300% rise in Germany.
Tesla introduced cheaper Model Y and Model 3 models last year in hopes of boosting sales. In Europe, it also cut the cost of leasing and loans. Sales were also helped by a surge of EV buying in general on the continent as gas and diesel prices have risen due to the Iran war.
"Their pricing and their products are helping the buyers overcome any issues they might have with Elon Musk personally," said Sam Fiorani, vice president at research firm AutoForecast Solutions.
For future quarters, Tesla hopes to lure even more Europeans as countries approve use of its driver assistance feature, available in the U.S., called Full Self-Driving (Supervised). The Netherlands approved the system in April, followed by Estonia, Greece and Lithuania.
Sales fell last year amid protests at showrooms in Europe and the U.S., a Musk figure burned effigy in Milan and vandalism against Tesla drivers. Customers were angry about him publicly supporting far-right political candidates in elections. In the U.S., too, many of Tesla's traditional buyers stopped buying because of Musk's work heading a Trump administration group cutting government spending.
Tesla was also hurt in the U.S. by the elimination of a tax break for buying electric vehicles in the fall last year, which added as much as $7,500 to EV costs. That is still keeping EV buyers away even as gas prices have risen.
Tesla sales in the U.S. weren't broken out in the latest report, but research firm Cox Automotive estimates they are still falling fast, down 20% in the second quarter from the year earlier period.
"I think the huge growth in Europe is the key driver for Tesla right now. U.S. sales still appear to be down, albeit less than the broader U.S. EV decline, while China is seeing small growth," said Seth Goldstein, senior equity analyst at Morningstar.
Goldstein, who had expected a third straight annual decline, said after the report: "I think it would be very hard to see a decline for the full year at this point."
Amid Tesla struggles last year, Musk managed to shift the narrative about the company's future away from its car business to its robots, automated driving system and self-driving robotaxis.
Judging from the stock price, investors approve. Shares have fully recovered from a deep dive early last year, rocketing more than 40% in the past 12 months.
