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Tesla sales tumble 13% as Musk backlash, competition and aging lineup turn off buyers

Tesla Talk

Tesla sales are down to start the year. Getty Images

Tesla sales fell 13% in the first three months of the year, another sign that Elon Musk’s once high-flying electric car company is struggling to attract buyers.

The double-digit drop is likely due to a combination of factors, including its aging lineup, competition from rivals and a backlash from Musk’s embrace of right wing politics. It also is a warning that the company’s first-quarter earnings report later this month could disappoint investors.

Tesla reported deliveries of 336,681 globally in the January to March quarter. The figure was down from sales of 387,000 in the same period a year ago. The decline came despite deep discounts, zero financing and other incentives.

Analysts polled by FactSet expected much higher deliveries of 408,000.

Dan Ives of Wedbush said in a note to clients that Tesla is seeing soft demand in the United States and China, as well as facing pressure in Europe.

“The brand crisis issues are clearly having a negative impact on Tesla...there is no debate,” he said.

Ives said that Wall Street financial analysts knew the first-quarter figures were likely to be bad, but that it was even worse than expected, calling them a “disaster on every metric.”

The sales drop came three weeks after President Donald Trump held an extraordinary press conference outside the White House in which he praised Tesla, blasted boycotts against the company and bought a Tesla himself while TV cameras rolled in an effort to help lift sales.

“I don’t like what’s happening to you,” said Trump, before slipping into a red Model S and exclaiming, “Wow. That’s beautiful.”

After falling as much as 6% in early Wednesday, Tesla stock shot up more than 5% in afternoon trading after a report from Politico, citing anonymous sources, that Musk may soon step down from leadership of his Department of Government Efficiency, the cost-cutting group that has led to tens of thousands of federal workers losing their jobs.

Tesla investors have complained the DOGE work has diverted Musk's focus from Tesla, where he is the CEO. On Tuesday, New York City's comptroller overseeing pension funds down $300 million this year on Tesla holdings called for a lawsuit accusing a distracted Musk of "driving Tesla off a financial cliff.”

Tesla’s stock has plunged by roughly half since hitting a mid-December record as expectations of a lighter regulatory touch and big profits with Donald Trump as president were replaced by fear that the boycott of Musk's cars and other problems could hit the company hard.

Analysts are still not sure exactly how much the fall in sales is due to the protests or other factors. Electric car sales have been sluggish in general, and Tesla in particular is suffering as car buyers hold off from buying its bestselling Model Y while waiting for an updated version.

Still, even bullish financial analysts who earlier downplayed the backlash to Musk’s polarizing political stances are acknowledging that it is hurting the company, something that Musk also recently acknowledged.

“This is a very expensive job,” Musk said at a Wisconsin rally on Sunday, referring to his DOGE role. “My Tesla stock and the stock of everyone who holds Tesla has gone roughly in half."

The protests come as the Austin, Texas electric vehicle maker faces fierce competition from other EV makers offering vastly improved models, including those of BYD. The Chinese EV giant unveiled in March a technology that allows it cars to charge up in just five to eight minutes.

Tesla is expected to report earnings of 48 cents per share for the first quarter later this month, up 7% from a year earlier, according to a survey of financial analysts who the car company by research firm FactSet.

Nearly all of Tesla’s sales in the quarter came from the smaller and less-expensive Models 3 and Y, with the company selling less than 13,000 more expensive models, which include X and S as well as the Cybertruck.

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Tesla has released a free software upgrade to address the issue. Photo via tesla.com

Tesla Cybertruck recalled for 5th time within a year, the latest due to rearview display

another one

Tesla is recalling more than 27,000 Cybertrucks because the rearview camera image may not activate immediately after shifting into reverse, the fifth recall for the vehicle since it went on sale late last year.

Tesla has released a free software upgrade to address the issue and owner notification letters are expected to be mailed Nov. 25.

Cybertruck owners have had to deal with a series of recalls since the vehicle went on sale in November. In June, there was a recall to fix problems with trim pieces that can come loose and front windshield wipers that can fail. Two months before that, some Cybertrucks were recalled because the accelerator pedal could stick.

In the most recent recall, the company notified the National Highway Traffic Safety Administration that the display screens in the trucks may remain blank for up to 8 seconds after a driver shifts to reverse. The U.S. requires those screens to activate with a rearview within 2 seconds of shifting into reverse.

The Cybertruck was recalled twice in June to fix problems with trim pieces that can come loose and front windshield wipers that can fail. It has been recalled four times since its introduction. In August in the Baytown area of Chambers County, a Cybertruck was heading down a parkway when it left the road for an unknown reason, hit a concrete culvert and went up in flames. The National Highway Traffic Safety Administration is looking into the crash.

Elon Musk's Tesla delivered the first dozen or so of its futuristic Cybertruck pickups to customers in November, two years behind the original schedule.

Owners may contact Tesla customer service at 1-877-798-3752 or the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 or go to www.nhtsa.gov.

Shares of Tesla Inc. dropped sharply in morning trading yesterday. Photo via Tesla Motors/Instagram

Texas-based Tesla posts first quarterly increase in deliveries, but shares slump

mixed feelings

Low interest financing, sweet lease deals, price cuts and free charging boosted Tesla’s global deliveries in the third quarter, the first increase this year for the electric vehicle maker.

The Austin, Texas, company said Wednesday that it delivered 462,890 vehicles from July through September, bolstered by loans as low as 1.99%, and $299 monthly leases on the Model 3, its least expensive vehicle. It delivered 435,059 vehicles during the same period last year.

The figures for July through September came in slightly higher than analyst estimates of 462,000 for the period, according to data provider FactSet.

However, shares of Tesla Inc. dropped sharply in morning trading, down nearly 4%.

The deliveries were “good and a step in the right direction,” wrote Dan Ives of Wedbush, but that there would be pressure on the company's stock because investors had been hoping for even better.

“Overall, this is a clear improvement from the first half and we believe getting in the range of 1.8 million for the year is still the key and important bogey,” Ives said.

Tesla has struggled much of the year to sell its aging model lineup as growth in electric vehicle sales in the U.S. and Europe slowed due to concerns with range, price and the ability to charge on trips.

Falling sales early in the year led to once-unheard of discounts for the automaker, cutting into its industry leading profit margins. Analysts estimated that Tesla’s average vehicle sales price was $42,500 for the third quarter, the lowest price in four years.

The sales decline likely will pull down third quarter earnings when they are announced on Oct. 23.

Tesla’s sales decline comes as competition is increasing from legacy and startup automakers, which are trying to nibble away at the company’s market share.

Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 22,915 of its more expensive models that include X and S, as well as the new Cybertruck.

Wedbush analyst Dan Ives wrote in a note to investors Tuesday that third-quarter sales would bring a rebound as China sales continue to increase and price and demand stabilizes.” As China continues to heat up on the demand story for Tesla with favorable leasing/financing terms and pent-up demand in the region, we are confident that we will see a significant growth figure in the region,” he wrote.

Europe will continue to be slow with macroeconomic pressures, and U.S. demand should stabilize, Ives wrote.

But BNP Paribas Exane said in an investor note that long term expectations of the market are somewhat high for Tesla. The company said its sales estimates for 2026 and 2027 “remain 10% to 15% below the street, respectively.”

Tesla is scheduled to unveil a purpose built robotaxi at an event next week.

The death apparently is the first involving the angular stainless steel-clad truck. Photo via Tesla Motors/Instagram

Houston-area Tesla fire, fatal crash raises questions from US auto safety agency

ongoing investigation

Federal safety authorities say they are seeking information on a crash and fire involving a Tesla Cybertruck that killed a driver of the futuristic new pickup.

The National Highway Traffic Safety Administration said Wednesday it is gathering information from Tesla. The agency did not send crash investigators, nor has it opened a formal investigation into the crash. It did not say if it is investigating the cause of the fire or whether the driver was using a partially automated driving system.

Messages were left Wednesday seeking comment from Tesla and the Texas Department of Public Safety.

The death apparently is the first involving the angular stainless steel-clad truck, which went on sale Nov. 30.

KHOU-TV reported that state troopers are investigating the crash, which occurred in the Baytown area of Chambers County early Monday. The truck was heading down a parkway when it left the road for an unknown reason, hit a concrete culvert and went up in flames, the station reported.

The Cybertruck was recalled twice in June to fix problems with trim pieces that can come loose and front windshield wipers that can fail. It has been recalled four times since its introduction.

The Austin, Texas, company said Tuesday that it sold 443,956 vehicles from April through June, down 4.8 percent from 466,140 sold the same period a year ago. Photo courtesy of Tesla

Tesla sales fall for second straight quarter despite price cuts, but decline not as bad as expected

by the numbers

Tesla's global sales fell for the second straight quarter despite price cuts and low-interest financing offers, another sign of weakening demand for the company's products and electric vehicles overall.

The Austin, Texas, company said Tuesday that it sold 443,956 vehicles from April through June, down 4.8 percent from 466,140 sold the same period a year ago. But the sales were better than the 436,000 that analysts had expected.

The better-than-expected deliveries pushed Tesla's stock up 10 percent Tuesday. The stock is down about 7 percent so far this year, but it has nearly erased larger losses from prior months. Tesla shares had been down more than 40 percent earlier in the year, but are up more than 60 percent since hitting a 52-week low in April.

Demand for EVs worldwide is slowing, but they're still growing for most automakers. Tesla, with an aging model lineup and relatively high average selling prices, has struggled more than other manufacturers. Still it retained the title of the world's top-selling electric vehicle maker.

For the first half of the year, Tesla sold 830,766 electric vehicles worldwide, handily beating China's BYD, which sold 726,153 EVs.

Tesla also sold over 33,000 more vehicles during the second quarter than it produced, which should reduce the company's inventory on hand at its stores.

Tesla's sales decline comes as competition is increasing from legacy and startup automakers, which are trying to nibble away at the company's market share. Most other automakers will report U.S. sales figures later Tuesday.

Tesla gave no explanation for the sales decline, which is a harbinger of what to expect when it posts second-quarter earnings on July 23.

Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 21,551 of its more expensive models that include X and S, as well as the new Cybertruck.

The sales decline came despite Tesla knocking $2,000 off the prices of three of its five models in the United States in April. The company cut the prices of the Model Y, Tesla’s most popular model and the top-selling electric vehicle in the U.S., and also of the Models X and S.

The April cuts reduced the starting price for a Model Y to $42,990 and to $72,990 for a Model S and $77,990 for a Model X. Last week, Tesla lopped $2,340 off the $38,990 base price of some newly revamped Model 3s that were in the inventory shipped to its stores.

In addition, Tesla in May offered 0.99 percent financing for up to six years on the Model Y. In June, it offered interest as low as 1.99 percent for three years on the rear-wheel-drive Model 3. Typical new-vehicle interest rates average just over 7 percent, according to Edmunds.com.

Also during the quarter, Tesla knocked roughly a third off the price of its “Full Self Driving” system — which can’t drive itself and so drivers must remain alert and be ready to intervene — to $8,000 from $12,000, according to the company website.

Jessica Caldwell, head of insights for Edmunds.com, said Tesla is having trouble in a market where most early adopters already have EVs, and mainstream buyers are more skeptical that electric cars can meet their needs.

Tesla's “haphazard” price cuts don't work as well as they once did because consumers now expect them, she said. “We’ve seen the automaker exhaust its bag of tricks by lowering prices and increasing incentives to spur demand without much success in the U.S. market,” Caldwell said.

Also, Tesla's aging model lineup doesn’t look much different than it did years ago she said. And with price cuts, used Tesla prices tumbled. Anyone wanting a Tesla can get a far better deal buying a used one, Caldwell said.

Caldwell doesn’t see any big catalyst this year that would boost Tesla sales unless gasoline prices spike, and she said Musk's shift to the right since taking over Twitter has hurt the brand's image.

Wedbush analyst Dan Ives wrote in a note to investors Tuesday that second-quarter sales were a “huge comeback performance” for Tesla. “In a nutshell, the worst is in the rearview mirror for Tesla,” he wrote. The company, he wrote, cut 10 percent to 15 percent of its workforce to reduce costs and preserve profitability. “It appears better days are now ahead as the growth story returns,” Ives wrote.

In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date.

Tesla is scheduled to unveil a purpose built robotaxi at an event on Aug. 8.

Tesla has recalled the stainless steel-clad Cybertruck four times since it went on sale Nov. 30. Tesla Motors/Instagram

Tesla again recalls futuristic new Cybertruck

tapping the breaks

Tesla is recalling its futuristic new Cybertruck pickup for the fourth time in the U.S. to fix problems with trim pieces that can come loose and front windshield wipers that can fail.

Tesla, which has its operations based in Texas, has recalled the stainless steel-clad Cybertruck four times since it went on sale Nov. 30.

The new recalls, announced in documents posted Tuesday by the National Highway Traffic Safety Administration, each affect more than 11,000 trucks.

The company says in the documents that the front windshield wiper motor controller can stop working because it's getting too much electrical current. A wiper that fails can cut visibility, increasing the risk of a crash. The Austin, Texas, company says it knows of no crashes or injuries caused by the problem.

Tesla will replace the wiper motor at no cost to owners, who will be notified by letter on Aug. 18.

In the other recall, a trim piece along the truck bed can come loose and fly off, creating a hazard for other motorists.

Tesla says in documents that the trim piece is installed with adhesive, and that may not have been done properly at the factory.

The company will replace or rework the trim piece so it stays on. Owners will be notified by letter also on Aug. 18.

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Gold H2 harvests clean hydrogen from depleted California reservoirs in first field trial

breakthrough trial

Houston climatech company Gold H2 completed its first field trial that demonstrates subsurface bio-stimulated hydrogen production, which leverages microbiology and existing infrastructure to produce clean hydrogen.

Gold H2 is a spinoff of another Houston biotech company, Cemvita.

“When we compare our tech to the rest of the stack, I think we blow the competition out of the water," Prabhdeep Singh Sekhon, CEO of Gold H2 Sekhon previously told Energy Capital.

The project represented the first-of-its-kind application of Gold H2’s proprietary biotechnology, which generates hydrogen from depleted oil reservoirs, eliminating the need for new drilling, electrolysis or energy-intensive surface facilities. The Woodlands-based ChampionX LLC served as the oilfield services provider, and the trial was conducted in an oilfield in California’s San Joaquin Basin.

According to the company, Gold H2’s technology could yield up to 250 billion kilograms of low-carbon hydrogen, which is estimated to provide enough clean power to Los Angeles for over 50 years and avoid roughly 1 billion metric tons of CO2 equivalent.

“This field trial is tangible proof. We’ve taken a climate liability and turned it into a scalable, low-cost hydrogen solution,” Sekhon said in a news release. “It’s a new blueprint for decarbonization, built for speed, affordability, and global impact.”

Highlights of the trial include:

  • First-ever demonstration of biologically stimulated hydrogen generation at commercial field scale with unprecedented results of 40 percent H2 in the gas stream.
  • Demonstrated how end-of-life oilfield liabilities can be repurposed into hydrogen-producing assets.
  • The trial achieved 400,000 ppm of hydrogen in produced gases, which, according to the company,y is an “unprecedented concentration for a huff-and-puff style operation and a strong indicator of just how robust the process can perform under real-world conditions.”
  • The field trial marked readiness for commercial deployment with targeted hydrogen production costs below $0.50/kg.

“This breakthrough isn’t just a step forward, it’s a leap toward climate impact at scale,” Jillian Evanko, CEO and president at Chart Industries Inc., Gold H2 investor and advisor, added in the release. “By turning depleted oil fields into clean hydrogen generators, Gold H2 has provided a roadmap to produce low-cost, low-carbon energy using the very infrastructure that powered the last century. This changes the game for how the world can decarbonize heavy industry, power grids, and economies, faster and more affordably than we ever thought possible.”

Rice University spinout lands $500K NSF grant to boost chip sustainability

cooler computing

HEXAspec, a spinout from Rice University's Liu Idea Lab for Innovation and Entrepreneurship, was recently awarded a $500,000 National Science Foundation Partnership for Innovation grant.

The team says it will use the funding to continue enhancing semiconductor chips’ thermal conductivity to boost computing power. According to a release from Rice, HEXAspec has developed breakthrough inorganic fillers that allow graphic processing units (GPUs) to use less water and electricity and generate less heat.

The technology has major implications for the future of computing with AI sustainably.

“With the huge scale of investment in new computing infrastructure, the problem of managing the heat produced by these GPUs and semiconductors has grown exponentially. We’re excited to use this award to further our material to meet the needs of existing and emerging industry partners and unlock a new era of computing,” HEXAspec co-founder Tianshu Zhai said in the release.

HEXAspec was founded by Zhai and Chen-Yang Lin, who both participated in the Rice Innovation Fellows program. A third co-founder, Jing Zhang, also worked as a postdoctoral researcher and a research scientist at Rice, according to HEXAspec's website.

The HEXASpec team won the Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge in 2024. More recently, it also won this year's Energy Venture Day and Pitch Competition during CERAWeek in the TEX-E student track, taking home $25,000.

"The grant from the NSF is a game-changer, accelerating the path to market for this transformative technology," Kyle Judah, executive director of Lilie, added in the release.

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This article originally ran on InnovationMap.

Houston renewable energy retailer expands nationally and more news to know

Trending News

Editor's note: The top Houston energy transition news of June 2025 includes Rhythm's national expansion, CenterPoint's grid resiliency efforts, and an exciting research discovery. Get the details on the most-read EnergyCapitalHTX stories from June 15-30 below:

1. Houston's Rhythm Energy expands nationally with clean power acquisition

PJ Popovic, founder and CEO of Houston-based Rhythm Energy, which has acquired Inspire Clean Energy. Photo courtesy of Rhythm

Houston-based Rhythm Energy Inc. has acquired Inspire Clean Energy for an undisclosed amount. The deal allows Rhythm to immediately scale outside of Texas and into the Northeast, Midwest and mid-Atlantic regions.

Inspire offers subscription-based renewable electricity plans to customers in Pennsylvania, New York, New Jersey, Massachusetts, Ohio, Delaware, Illinois, Maryland, and Washington, D.C. By combining forces, Rhythm will now be one of the largest independent green-energy retailers in the country. Continue reading.

2. CenterPoint reaches agreement on SRP to significantly reduce outages

CenterPoint says it will cut storm-related outages by 1 billion minutes with its new Systemwide Resiliency Plan. Photo via Getty Images

CenterPoint Energy has reached a settlement agreement with parties to its 2026-2028 Systemwide Resiliency Plan (SRP), which will represent the largest single grid resiliency investment in CenterPoint's history.

The plan is expected to reduce storm-related outages by 1 billion minutes for its 2.8 million customers by 2029 and build on the first two phases of the company's Greater Houston Resiliency Initiative (GHRI). This SRP is designed to further address the impacts of extreme weather threats. Continue reading.

3. Enbridge activates first solar power project in Texas

Enbridge Inc. is now generating 130 megawatts of energy from its Orange Grove solar project near Corpus Christi. Photo courtesy Enbridge

Canadian energy company Enbridge Inc., whose gas transmission and midstream operations are based in Houston, has flipped the switch on its first solar power project in Texas.

The Orange Grove project, about 45 miles west of Corpus Christi, is now generating 130 megawatts of energy that feeds into the grid operated by the Electric Reliability Council of Texas (ERCOT). Orange Grove features 300,000 solar panels installed on more than 920 acres in Jim Wells County. Construction began in 2024. Continue reading.

4. Texas drivers continue to pump the brakes on EVs, shows new report

Texas falls among the middle of the pack when it comes to EV adoption, according to a new report. Photo via Unsplash

Even though Texas is home to Tesla, a major manufacturer of electric vehicles, motorists in the Lone Star State aren’t in the fast lane when it comes to getting behind the wheel of an EV.

U.S. Department of Energy data compiled by Visual Capitalist shows Texas has 689.9 EV registrations per 100,000 people, putting it in 20th place for EV adoption among the 50 states and the District of Columbia. Continue reading.

5. Houston team’s discovery brings solid-state batteries closer to EV use

Houston researchers have uncovered why solid-state batteries break down and what could be done to slow the process. Photo via Getty Images.

A team of researchers from the University of Houston, Rice University and Brown University has uncovered new findings that could extend battery life and potentially change the electric vehicle landscape.

The team recently published its findings in the journal Nature Communications. The work deployed a powerful, high-resolution imaging technique known as operando scanning electron microscopy to better understand why solid-state batteries break down and what could be done to slow the process. Continue reading.

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