Despite Elon Musk stepping away from his DOGE activities, Tesla’s sales have continued to slide. No doubt Musk hoped that the release earlier this year of the refreshed Model Y would help reverse these fortunes; however, describing the six-year-old midsize crossover EV as “new” appears not to have attracted as many buyers as Tesla anticipated.
Model Y is crucial for Musk; it accounts for roughly two-thirds of Tesla's global sales (though this fluctuates). Last year, however, according to JATO Dynamics, the Y lost its top slot in the rankings for world’s top-selling car in 2024 to Toyota. The revamped Model Y was launched in January, but it only became globally available through May.
While there’s no definitive data yet on how well the car is performing at retail—Tesla doesn’t publish model or country sales number splits—the early signs do not look good. Many markets offer discounts and low-interest loans for the Model Y, and delivery is reportedly immediate for those interested, suggesting a general lack of demand, which is far different from the long wait times typically seen for the previous Model Y.
The refreshed Model Y features a Cybertruck-like light bar on the front. Courtesy of Tesla
With many analysts pinning Tesla’s current woes on Musk’s tanking popularity, bulls have kept the faith, claiming that last year’s sales decline was mainly due to reduced inventory as production switched over to the revamped Model Y, with would-be customers delaying purchases until this year’s delivery of the makeover of a vehicle unveiled back in 2019.
According to the latest report from Kelley Blue Book, Tesla’s US sales fell 9 percent in the first quarter. Receipts didn’t pick up when the revamped Model Y became more widely available, with Kelley Blue Book estimating Model Y sales in the US falling by 15 percent year over year in the second quarter. (Tesla reported on July 2 it sold 384,122 cars in the second quarter of 2025, a near 15 percent decline from the previous year.) “The hyper-competitive [US] EV market is providing the troubled automaker no relief,” noted Cox Automotive’s analysis.
Speaking on the second quarter Tesla figures, Cox Automotive's director of industry insights Stephanie Valdez Streaty says this was “more than double the overall EV market’s 6.3 percent drop, making it a standout in terms of softness.” However, she stresses, the Model Y still “commands a dominant 28 percent share of the EV market.” Nevertheless, The New York Times reported that Tesla's factories were operating at just 70 percent capacity in the second quarter.
Tesla sales in Europe remain depressed. In Sweden, Tesla sold 53.7 percent fewer cars in May compared to the same month a year earlier, while in Portugal sales were down 68 percent. And this was on top of similarly steep falls in previous months. Most other European markets were down by similar numbers, but inexplicably, in Norway, sales jumped by 213 percent in May, according to data from the Norwegian Road Federation.