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Tesla’s sales slump continues – Is a budget model the answer?

By Mathilda Bartholomew | July 4, 2025

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Tesla's sales are falling for the second year in a row. Could a cheaper EV be the comeback they need?

Tesla’s sales slump continues – Is a budget model the answer?

Tesla’s hit another rough patch, and this one’s starting to sting. Could a budget-friendly electric car be the lifeline they need?

Between April and June, Tesla delivered 384,122 cars worldwide. That might sound decent, but it’s actually a 13.5% drop from this time last year and the second quarter in a row sales have slipped. If things don’t turn around, 2025 could mark Tesla’s second straight year of decline.

It’s a far cry from the days when Tesla was smashing delivery records and aiming for 50% annual growth. So, what’s going wrong?

After years of steady hype and growth, the electric car market is cooling off. Tesla, still the most famous EV brand out there, isn’t immune. In 2024, they sold 1.79 million cars, down slightly from 1.81 million in 2023. This year? They're on track to do even worse.

They had high hopes the updated Model Y, their best seller, would turn things around, but… it hasn’t. Tesla hasn’t dropped the usual model-by-model breakdown, but industry insiders say the revamped Model Y hasn’t made a splash. In Europe alone, sales dropped 11% in 2024, and that’s after a massive 56% jump the year before.

And then there’s the Cybertruck. You can’t get it in the UK, but across the pond in the US, the stainless-steel beast is still more meme than must-have. Tesla once planned to pump out 250,000 of them a year. Right now? They’re barely hitting 20,000.

Of course, it wouldn’t be Tesla drama without Elon Musk. Since linking up with Donald Trump’s team in the US, Musk’s been facing protests and PR backlash. He’s let go of top execs, promised to “refocus” on Tesla, and launched a limited version of Tesla’s Robotaxi service in Austin, Texas, though that’s still in beta territory.

Politics aside, bigger challenges are looming. A major new law in the US has cut key EV perks like tax breaks and funding for charging stations, not great for Tesla, which only sells electric cars.

In the UK, EV adoption is still crawling forward, but plenty of people are hesitant. Insurance prices are high, charging infrastructure can be a pain, and electric cars still come with a hefty price tag. The UK auto industry wants the government to step in with more support.

Tesla’s tried to fight back with price cuts, better finance deals, minor upgrades across the range, but none of it has stopped the sales slump.

Could a £25k Tesla Turn It Around?

Now all eyes are on Tesla’s next move: affordable EVs. The company’s been teasing cheaper versions of the Model 3 and Model Y for months, and they were meant to hit production in early 2025… but it’s unclear if that’s actually happened.

If Tesla can drop a proper electric car closer to £25,000, it could be a huge win, especially here in the UK, where buyers are crying out for budget-friendly EVs. It would also put Tesla head-to-head with rising Chinese brands like BYD, which are quickly making waves in the UK market.

For now, though, Tesla’s stuck. Sales are down, public opinion is shaky, and the EV market is moving fast. We’ll know more on 23 July when Tesla drops its next earnings report and we’ll finally get a clearer picture of whether they’re steering back on course… or heading for another stall.

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