Tesla just reported its Q2 2025 delivery figures on Wednesday, delivering a total of 384,122 vehicles, marking a 14% year-over-year decline and representing the second consecutive quarter of YoY decrease. However, despite the weaker delivery numbers compared to last year, the market reaction was unexpectedly positive, with Tesla's stock rising over 4% on Wednesday.

For comparison, Tesla delivered 443,956 vehicles and produced 410,831 units in Q2 2024. The Q2 2025 production stood at 410,244 vehicles, with deliveries slightly below Wall Street analysts' consensus estimate of 387,000 units.

The best-selling Model 3 and Model Y accounted for 396,835 units produced and 373,728 vehicles delivered. Other models contributed 10,394 deliveries.

Despite the delivery slump, some analysts believe Tesla may have passed its most challenging period. Deepwater Asset Management analyst Gene Munster noted that the delivery numbers were about 4% higher than market expectations. Independent analyst Troy Teslike had predicted 356,000 deliveries for the quarter on Patreon, while prediction market Kalshi estimated 364,000 - both below the actual results.

Tesla faces multiple challenges, particularly from intensifying competition in the EV market. Chinese automakers have been launching more competitively priced models, gradually eroding Tesla's market share. Additionally, Tesla mentioned in Q1 that some customers' delayed orders were while waiting for the refreshed Model Y SUV, which began deliveries in March.

Political factors have also significantly impacted Tesla. CEO Elon Musk's controversial political stances - including supporting Donald Trump in the U.S. and Germany's far-right anti-immigration AfD party - have sparked protests, affecting brand image and consumer sentiment.

Musk previously served as head of the "Department of Government Efficiency (DOGE)" during the Trump administration, pushing policies to reduce federal agency size and regulations, the very agencies overseeing his business empire. Though Musk concluded his formal DOGE role in May 2025, his relationship with Trump has recently deteriorated. Last weekend, he criticized a Trump-backed trillion-dollar spending bill and called for forming a "third political party.

According to Energy Innovation, the proposed bill could hurt Tesla's solar and battery businesses and reduce annual EV sales by 100,000 units through 2035 if passed. Trump has also threatened to revoke some subsidies for Musk's companies and even suggested "possibly deporting Musk," despite Musk being a naturalized U.S. citizen.

Notably, Tesla's flagship Cybertruck, which began deliveries in November 2023, has been recalled eight times for various hardware and software issues. This quarter, its deliveries were included in the "other models" category.