Tesla blew past Wall Street estimates for second-quarter deliveries on Thursday, posting a record for the period as recovering demand in Europe outweighed persistent weakness in North America.
Record deliveries signal momentum
The company delivered 480,126 vehicles in the April to June period, a record for the second quarter and up about 25% from a year earlier, easily surpassing analysts' average estimate of 402,776 vehicles, according to Visible Alpha data.
The strong figures suggest Tesla's mainstay auto business is regaining momentum after two straight annual sales declines, providing the spending cushion needed to power its ambitions in autonomous driving and artificial intelligence – the main drivers of the company's roughly $1.6tn valuation.
Tesla expects to spend more than $25bn on capital expenditure in 2026, nearly triple the $8.5bn last year, to expand AI infrastructure, battery production, Cybercab manufacturing and Optimus robots.
European recovery fuels growth
“I think the huge growth in Europe is the key driver for Tesla right now. US sales still appear to be down, albeit less than the broader US EV decline, while China is seeing small growth,” said Seth Goldstein, senior equity analyst at Morningstar.
Tesla's recovery in Europe was aided by government EV incentives, faster electrification of corporate fleets, higher fuel prices and an easing of the consumer backlash over CEO Elon Musk's far-right politics last year.
Production and inventory
Tesla produced 451,758 vehicles during the quarter. The deliveries exceeded production by more than 28,000 vehicles, leading the company to draw down inventory that it built up during the first quarter.
The company's China-made EV sales have risen this year, helped by production of the refreshed Model Y, despite intense competition from BYD and other domestic automakers.
Competitor performance
Earlier in the day, smaller rival Rivian raised its annual deliveries forecast and beat estimates for second-quarter deliveries.
FSD and robotaxi expansion
Tesla has continued to roll out its “full self-driving” (FSD) advanced driver assistance software in Europe, although it is only available in a handful of countries. Analysts expect broader availability over the coming months to support demand.
The company expanded its robotaxi operations after launching a limited commercial service in Austin in June. Musk has said the company intends to rapidly expand the service through 2026.
Production of the Cybercab, Tesla's purpose-built autonomous vehicle without pedals or a steering wheel, is expected to ramp up later this year.
