With much of his public comments these days focusing on politics, it's sometimes easy to forget that Elon Musk is the CEO of a major car company.
While Tesla may have taken a back seat in Musk's social media feed, the fact that the company's shares account for the majority of his $351 billion fortune means its problems have to be at least near the top of his to-do pile.
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Musk was seemingly able to ignore those problems, even as they piled up, while he was head of the Department of Government Efficiency.
When he exited that position a month ago, it seemed that although Tesla was having issues, the future was bright, since Musk still had a direct line to President Donald Trump. Plus, Musk said that without the DOGE distraction, he was recommitting himself to Tesla full time.
However, in the ensuing weeks since his exit from the White House, Musk has grown distant from his former boss, attacking his top legislative agenda and associating the president with convicted pedophile Jeffrey Epstein.
The feud hit a fever pitch this week, with the president suggesting he could cut all of Musk's government subsidies and even saying (perhaps jokingly, perhaps not) he could deport him.
But once again, Musk has bigger issues at Tesla that came to a head July 2.
Tesla reports another dismal quarter as sales drop again
Tesla had a rough start to the year as Musk's political outspokenness has turned off many potential buyers. After record sales in Q4 2024, the company has now reported two straight quarters of falling sales.
Tesla reported a 13.5% decline in second quarter global sales Tuesday to 384,122 units, missing analyst estimates by about 3,000 units.
After using steep discounts to push sales last year, Tesla has relied on refreshed versions of its popular Model Y SUV and low-cost financing to entice customers in 2025.
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“It's already turned around,” Musk responded curtly during the Qatar Economic Forum in May when asked about turning around Tesla's declining sales.
“Europe is our weakest market, but we're strong everywhere else. Our sales are doing well now, and we don't anticipate any shortfall.”
Musk did not provide evidence that the sales picture had improved at the time, and this week's results suggest that sales haven't improved.
However, he did point to his company's stock performance as a way to show that the ship had been righted.
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Tesla shares were rising 4.4% at last check in morning trading on July 2, seemingly once again shaking off the disappointing news.
Despite this rally, the stock is still down more than 17% year to date.
Tesla reports two dismal sales quarters in a row
Tesla was riding high last year after Musk revealed his allegiance to Trump and the pair cruised into the West Wing hand in hand.
But the all-time record quarterly deliveries the company reported in the fourth quarter haven't carried over to 2025.
The company reported a 9% decline in first-quarter revenue to $19.3 billion, missing analyst estimates by $2 billion.
Earnings of 27 cents per share fell short of Wall Street expectations by 34%.
Europe, while only a small percentage of sales, was a challenging region in the quarter, as sales in Germany reportedly fell 62% and numbers in Norway, the UK and France weren't much better.
Auto revenue for the company fell 20% yearly to $13.9 billion.
To Elon's earlier point, however, Tesla investors bid up the stock 40% in the weeks after the release.
Tesla believers still believe. But after a few more quarters like this, they will have to start asking some tough questions.
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