Tesla sales jumped from June to July but were down year over year
July data from Cox Automotive shows US EV sales grew 26.4% month over month and 19.7% year over year, their second-best month ever.
The highest sellers by volume were Tesla, Chevrolet, Hyundai, Ford, and Honda. Tesla still accounts for roughly 5x the EV sales of the others, but they are growing far faster on a monthly and annual basis. (Tesla saw a slight year-on-year decline in sales.)
The data is a rare bright spot for Tesla’s automotive business, which dropped 16% last quarter compared with a year earlier as the company faces declining demand for its cars.
One of the reasons for the growth in US EV sales, including Tesla’s last month, is that next month will mark the end of the $7,500 regulatory credits, so it’s pushing forward demand. How much the change will affect the companies’ top and bottom lines will depend on how steep the price cuts they enact to compensate are.
Additionally, the US government this month stopped issuing compliance letters to automakers for violating fuel economy standards, effectively dissolving the market for regulatory credits. Tesla is expected to miss out on about $255 million in regulatory credits — essentially pure profit — each quarter going forward.
Combined, the end of US regulatory credits and EV tax credits could jeopardize more than half of Tesla’s profits, according to JPMorgan estimates.
