Tesla's sales fell short of expectations, yet its market value surged by 340 billion. Can Musk still juggle founding a political party while managing these developments?
Tesla's Sales Decline Further in Q2
Last week, while the outside world was focused on the public spat between Elon Musk and Donald Trump over the "Big and Beautiful" bill, Tesla released its latest Q2 delivery data. Perhaps the data was so poor that even Musk had to be cautious.
On July 2, Musk posted on X, praising Trump for brokering a ceasefire in Gaza. "Credit where credit is due. Trump has successfully resolved multiple major global conflicts." For a moment, netizens around the world were left scratching their heads. They said, "One moment they're enemies, the next they're friends. It's impossible to understand the love - hate relationship between Trump and Musk."
On the same day, Tesla's latest data showed that in the second quarter of 2025, the company delivered 384,122 vehicles, a year - on - year decline of about 13.5%. Among them, the combined delivery volume of the main models, Model 3 and Y, was 373,728 vehicles. This is also the second consecutive quarter of year - on - year decline in Tesla's delivery volume. Tesla's Q1 financial report released in April showed that the company's global vehicle delivery volume in the first quarter was nearly 336,700 vehicles, a quarter - on - quarter and year - on - year decline of 32% and 13% respectively, the lowest since Q4 2022.
Theoretically, such poor data should have led to a sharp drop, but Tesla was different and instead soared. On July 2, Eastern Time, Tesla's stock price rebounded strongly by 4.97%, and its market value soared by $48.1 billion (about 345 billion yuan) overnight, once again becoming the focus of the global capital market. The direct reason behind this sudden surge should be that the data slightly exceeded analysts' expectations, and it was the capital replenishment brought about by the bottom - building sentiment. But in the long run, it should be the re - affirmation and support for Tesla's AI technology narrative, as well as the expectation for Musk, the biggest mystery at Tesla. Perhaps Musk will lead Tesla to reverse the situation again, just as he has done countless times in the past.
Tesla released its Q2 delivery data: 384,000 vehicles were delivered, a year - on - year decline of 13.5%, but higher than the market's general expectation of 365,000 vehicles. Especially compared with the predictions of "severe recession" by many investment banks such as Goldman Sachs and Citigroup, this data is a typical case of "low expectation + slightly exceeding expectations". Some market participants believe that although Tesla's electric vehicle sales growth has slowed down, it has bottomed out, and the pessimistic expectations are starting to be revised.
Whether others believe it or not, Cathie Wood, the biggest bull of Tesla, has taken action. On Tuesday this week, Cathie Wood increased her holdings. She bought a total of 56,368 shares of Tesla, worth about $17.91 million.
So, how does Musk plan to continue the story of Tesla? Will it become mediocre, or will he once again create a magical moment and lead Tesla into the next era? Also, can Musk focus on founding a political party?
What's on Musk's Mind
01 Tesla is an AI company, not a "damn" car manufacturer
Recently, Li Xiang, the founder of Li Auto, publicly stated, "I no longer want to be a CEO of a car company. I want to be a CEO of an artificial intelligence company." This might sound strange to those who don't understand. How can a car - maker become an AI company? But if we look at Musk's story, we'll know it's not that far - fetched.
When Tesla went public in 2010, Musk was determined to draw a clear line from fuel - powered car manufacturers: "We are closer to Apple or Google than to General Motors or Ford."
According to Musk's plan, as the penetration rate of electric vehicles increases, Tesla will shift its competitiveness from manufacturing to software capabilities represented by autonomous driving, robotaxis, and robots, and ultimately become an artificial intelligence company.
So, Musk has been painting this picture from the very beginning. In February 2015, when Tesla's financial report fell short of expectations, Musk advised investment institutions on a conference call to "look at the long - term": "In ten years, Tesla's market value will surpass that of Apple and become the company with the highest market value in the world, leaving the top 20 traditional car manufacturers far behind."
So, don't regard Tesla as a traditional car manufacturer. We should evaluate its future and value from the perspective of AI.
However, even from an AI perspective, analysts' conclusions vary greatly. According to Bloomberg data in early June, the range of analysts' 12 - month price targets for the stock is one of the widest among the S&P 500 - from a low of $115 per share to as high as $500. In other words, this represents a difference in Tesla's market value from $370 billion to $1.6 trillion within a year.
Analysts' models do not separately list the impact of Musk on Tesla's valuation. Bloomberg Intelligence said that the "Musk factor" is reflected in the gap between the success probabilities of different parts of the business estimated by bullish and bearish analysts. Those with higher price targets seem to be more optimistic about the prospects of Tesla's autonomous vehicles, estimating that they constitute the largest part of the company's value. As Musk has almost staked the company's future on autonomous vehicles, he said that "solving this technological challenge is really the difference between Tesla being worth a lot or being basically worth nothing."
02 Robotaxi and FSD are the future of Tesla
Musk has always pinned his hopes on Robotaxi supported by FSD and has little interest in Model 2. It was only because of the slow progress of FSD that he reluctantly accepted the Model 2 project proposed by the executive team.
When Model 3 and Model Y were first launched and became very popular, there were rumors that Tesla would launch Model 2 - a truly entry - level electric vehicle that would completely relegate fuel - powered cars to history. This also aligns with Tesla's early - proposed Master Plan. Tesla once put it on the agenda, including building a factory in Mexico and planning to launch it in the first half of 2025. However, the construction of the Mexican factory has been repeatedly delayed. At the same time, there are reports that Musk doesn't want to launch a new model. Instead, he believes that Model 3 and Y, combined with FSD, can complete the revolution of electrification and intelligence.
But Musk clearly chose to promote FSD and make Robotaxi officially operate in multiple cities. The capital market seems to buy into this narrative. After the story of autonomous driving, issues such as consecutive declines in sales and historically low gross margins can be temporarily ignored. Netizens joked that on average, each Robotaxi can bring $10 billion in revenue to shareholders.
Previously, Musk said that Robotaxi would be a combination of Airbnb and Uber. Tesla owners can use the app to add their vehicles to the Robotaxi network, providing taxi services for others, and they can join and leave the network flexibly.
According to UBS's estimate, if the project progresses smoothly, by 2040, in the United States alone, the Robotaxi network could expand to a scale of 2.3 million vehicles. Among them, 40% would be the official self - operated fleet, and 60% would come from other enterprises and ordinary car owners. Each vehicle would have an average annual operating mileage of about 50,000 miles. Tesla's annual revenue from Robotaxi could reach $203 billion, with a profit of $86 billion.
So, how has the officially launched Robotaxi performed?
On June 22, 2025, Tesla piloted the Robotaxi service in Austin, marking a key step for the FSD system towards the commercialization of autonomous driving. Judging from the behavior of a large number of tested vehicles, functional details, and passenger feedback, there is still a significant gap between its technological maturity and the "ideal" that Tesla has long claimed on social media.
Tesla's Robotaxi currently operates in Austin, Texas, with a fixed fare of $4.20. It is open to early - invited users. The deployed vehicles are driverless Model Ys, with a safety operator in the front - passenger seat. According to the feedback from the first - week road tests, although no major accidents occurred during the overall route execution, phenomena such as "multiple interventions by the safety operator", "confused route decision - making", "abnormal braking strategies", and "speeding" have emerged, sparking extensive discussions.
However, this Robotaxi test shows that the vision system is prone to mis - recognition and delayed response in complex scenarios.
When identifying static objects on the roadside (such as police cars) or temporary construction facilities, the vehicle often makes an "over - reactive" braking action, indicating that the current model still lacks the ability to distinguish between "static and dynamic obstacles". In addition, in scenarios that strongly rely on semantics, such as traffic signals and pedestrian - crossing behaviors, the context - understanding ability of the pure - vision route is limited, which also increases the probability of abnormal behaviors.
In terms of hardware, the Model Y Robotaxi is not equipped with lidar or high - precision maps, which is in line with Tesla's "end - to - end AI + on - board cameras" approach. However, in actual operation, it lacks a redundant perception mechanism. When the vision system is affected by a dirty camera, low light, or rainy and snowy weather, the system lacks fault - tolerance and alternative solutions.
Fully autonomous driving requires high - precision vehicle control, all - environment and all - weather perception and prediction capabilities, as well as strong redundancy and safety capabilities. We can mock Waymo for its expensive equipment and the lack of a clear path to profitability. But even if Robotaxi can achieve the same effect as Waymo with a pure - vision solution, it is still far from enough. Every safety accident of Robotaxi will raise significant legal and ethical issues and affect the already fragile trust. Tesla is no exception. Even a few major accidents could drag Tesla into an abyss.
UBS believes that Tesla's current valuation already reflects the commercialization results of Robotaxi 3 - 5 years from now. However, in reality, this business is still in the early trial - operation stage, and there is no scalable model yet. The current stock price may have entered the "bubble zone".
Different from the previous high - profile press conferences, Musk was extremely cautious and low - key about the launch of Robotaxi this time. It was completely different from his previous grand press conferences: only 10 vehicles were initially deployed, and only self - media bloggers and investors who are bullish on Tesla were invited to experience it. It was not open to the public. This shows that Musk is not as confident as his tweets suggest. He is well aware of the potential problems.
Looking at Tesla's stock - price performance in the past week, there has been a battle between bulls and bears on Wall Street, and investors are not fully convinced. The biggest uncertainties still focus on three aspects: whether the safety factor of Tesla's Robotaxi can meet the standards, whether it can reach the L4 level of autonomous driving, and whether subsequent regulations will become the biggest obstacle to commercialization.
Of course, these aspects are somewhat abstract and controversial. Their implementation will surely be a long and tortuous process. Ordinary people don't need to fully understand autonomous driving. They just need to look at some key points in Tesla's future, such as whether the FSD subscription rate is increasing, whether more cities are adding Robotaxi vehicles, and when the number will reach 10,000 or one million. The deployment of 10 Robotaxis is more symbolic than practical.
03 How to Save Tesla
Although Musk still has no intention of changing Tesla's AI - driven strategy, if Tesla's Q2 financial report is too poor and there is no improvement in the next few quarters, launching Model 2 will be a must. Although this is a competitive strategy of traditional car manufacturers, as long as it is effective, it is meaningful. Only a surviving Tesla can see the future.
Tesla's past sales myth is crumbling. From double - digit growth from 2017 - 2023, to a 1.1% year - on - year decline in 2024 for the first time, and then a 13% plunge in Q1 2025, its global market share has declined across the board.
At the same time, Tesla's dependence on the Chinese market is increasing. In 2024, China was the only market where Tesla's sales increased. However, its market share decreased from 15.8% in Q1 2021 to 5.6% in the same period this year. In contrast, BYD's market share has exceeded 30% for three consecutive years and remains stable.
The Chinese market is no longer a stable rear - base for Tesla. It urgently needs a transformation. Between launching a new model and organizational reform, Tesla China chose the latter.
With at least a 10% global lay - off, in some departments of Tesla China, the lay - off rate was close to 50%, and the sales system was also affected. An employee who has followed Zhu Xiaotong for many years said that this round of organizational - structure adjustment of Tesla's sales system is to meet the needs of market penetration. In the future, Tesla's store construction will mainly focus on lower - tier and sinking markets, and this adjustment can achieve more refined management of sales regions.
After this round of adjustment, on June 4 this year, Model 3 and Model Y of Tesla appeared in the catalog of new - energy vehicles for rural areas for the first time. This means that Tesla is expected to enter the rural market in China at a lower price. Perhaps this is why Model 2 doesn't need to be launched immediately. It may be more reasonable to first fully explore the demand in the sinking market with the main models and then launch Model 2.
The energy - storage business, which was once regarded as a stable cash - cow for Tesla, has also declined, and more fatally, its prospects are bleak.
Tesla's latest data shows that the installed capacity of its energy - storage products (Powerwall and Megapack), once a bright spot, has declined for two consecutive quarters. In the second quarter of this year, Tesla's total energy - storage installed capacity was 9.6 gigawatt - hours, a decrease of 0.8 gigawatt - hours from the first quarter and lower than the peak of 11 gigawatt - hours set in Q4 last year. In 2024, Tesla's total energy - storage product installed capacity reached 31.4 gigawatt - hours.
Currently, the political and economic environment in the United States is quite unfavorable for Tesla. There are two major challenges. One is the tariff pressure. The United States is raising tariff barriers on imported batteries and components, which may affect the overall project economy.
The other is the uncertainty of policy support. Republicans in the US Congress are trying to repeal key parts of the Inflation Reduction Act. Some of the support policies for new energy and energy storage during the Biden era may be cut.