Tesla Q2 auto sales jump 25%, beating expectations as higher fuel prices boost EV demand

Tesla beat Wall Street expectations for second-quarter vehicle deliveries on Thursday, delivering a record performance in the April-June period as a recovery in European demand helped offset ongoing softness in the North American market.

Stronger-than-expected delivery numbers suggest Tesla’s core automotive business is regaining momentum after two consecutive years of annual sales declines. The development also provides financial support for the company’s aggressive investments in autonomous driving and artificial intelligence, which underpin much of its approximately $1.6 trillion market value.

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The electric vehicle maker projects capital expenditures of more than $25 billion in 2026; That’s nearly three times the $8.5 billion spent last year. Planned investments will be directed to the expansion of artificial intelligence infrastructure, battery production, Cybercab production and the development of Optimus humanoid robots.

Tesla’s recovery in Europe has been driven by a combination of positive government incentives for electric vehicles, faster electrification of the company’s fleets, rising fuel prices and a gradual waning of consumer backlash associated with CEO Elon Musk’s far-right political views last year.

The company delivered 480,126 vehicles in the second quarter, its highest ever delivery in the April-June period, representing an increase of approximately 25% compared to the same quarter in the previous year. That figure comfortably beat analysts’ average forecast of 402,776 vehicles, according to data compiled by Visible Alpha.

Tesla produced 451,758 vehicles in the quarter. Deliveries exceeded production by more than 28,000 units, allowing the company to reduce inventories accumulated in the first quarter.

Sales of Tesla’s Chinese-made electric vehicles also strengthened this year, supported by production of the updated Model Y, despite intense competition from BYD and many other domestic EV manufacturers.

Shares of the Austin, Texas-based company fell nearly 2 percent on Thursday after rising 12 percent earlier in the week. Tesla also confirmed that it will announce its second-quarter financial results after markets close on July 22.

Market analysts said investor optimism ahead of the delivery report was largely reflected in stock prices, leading to a relatively muted market reaction despite the stronger-than-expected numbers.

Earlier Thursday, smaller electric vehicle rival Rivian also raised its full-year delivery forecast after reporting second-quarter deliveries that beat analysts’ expectations.

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Rivian now expects deliveries of 65,000 to 70,000 vehicles in 2026, down from its previous forecast of 62,000 to 67,000. It will need to deliver around 45,000 more vehicles in the second half of 2026 to reach the midpoint of its revised full-year target.

Tesla has continued to expand the availability of its Full Self-Driving (FSD) advanced driver assistance software across Europe, but the feature remains limited to a small number of countries. Analysts believe that wider deployments in the coming months could further increase demand for the company’s vehicles.

The automaker also expanded its robotaxi program after launching a limited commercial service in Austin in June. Elon Musk said Tesla plans to rapidly expand its autonomous ride-hailing service throughout 2026.

Meanwhile, production of Tesla’s Cybercab, a specially designed autonomous vehicle without a steering wheel or pedals, is expected to ramp up later this year as the company advances its autonomous driving goals.