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- Outbound volumes from Tesla’s GigaShangai factory, which includes exports, sank 15% in May. The drop follows similarly bleak figures out of most of Europe. Although Tesla is increasingly viewed as an AI company, roughly three-fourths of its revenue and gross profit come from selling cars.
With two-thirds of the second quarter now in the books, the chance Tesla’s EV sales could rebound from its terrible start to the year is swiftly waning.
On Thursday data continued to pour in from across the world showing demand for Elon Musk’s cars is shrinking in most major markets.
One sign of that emerged out of China, where aggregate sales of EVs made in Tesla’s largest manufacturing plant worldwide suffered an eighth straight month of declines.
According to China’s CPCA industry association, outbound volumes from its GigaShangai factory, including exports, sank 15% in May to 61,662 vehicles. It follows similarly bleak figures out of most of Europe.
Tesla may have successfully rebranded itself as an AI and robotics company in the eyes of investors, but EV sales still matter because they pay the bills. Its core business accounted for 72% of both revenue and gross profit in the first three months of this year, when volumes dropped to their lowest level in three years.
Valuation ‘disconnected from underlying fundamentals’
Yet just as sales are crashing, the stock is paradoxically ballooning, with the price rallying by a third since April’s terrible Q1 earnings.
At $1 trillion, Musk’s company is now the ninth most valuable company in the world, worth more than the next 15 largest global carmakers combined.
Multiples well above 100 times next year’s consensus earnings estimates, like Tesla’s, are typically reserved for companies about to see stratospheric earnings growth.
In this case, it reflects optimism that Musk is poised to capture Uber and Lyft’s ride-hailing market with its robotaxi service scheduled to roll out in the second half across much of the United States.
Yet there is no evidence its driverless technology already matches, let alone outperforms, autonomous vehicle leader Waymo, and one well-known Tesla bull sold the remainder of his stockholdings as a result.
Citing valuation “disconnected from underlying fundamentals”, Future Fund money manager Gary Black said late last month he exited his position for the first time since 2021 given the risks are firmly to the downside.
Tesla sales drop by more than a third in the UK and Germany
There are a few bright spots for Tesla car sales, like Norway, the world’s most EV-friendly country, that remains loyal to the brand.
Australia, a key market where Tesla must compete directly with Chinese brands for western consumers without the help of steep tariffs, likewise saw a 9% gain in May amid soaring demand for the refreshed Model Y.
But these individual data points are not reflective of the broader Tesla trend.
In most other parts of the world, the picture looks radically different. On Thursday, the United Kingdom followed Germany with an identical 36% decline in Tesla registrations for last month.
That leaves Tesla EV sales trackers such as TroyTeslike, one of the most reliable, warning Q2 will likely see a drop of 11% to 395,000 cars in a best-case scenario for Tesla.
This story was originally featured on Fortune.com
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https://fortune.com/2025/06/05/tesla-china-shanghai-car-sales-exports-monthly-decline/
Christiaan Hetzner
