Source: Tesla, Cox Automotive, China Passenger Car Association (CPCA), Leverage Shares analysis

Tesla’s plants in the U.S. and Europe mostly service the Western Hemisphere while its plant in Shanghai does the same for China and other proximate regions. While Tesla doesn’t explicitly break down production or deliveries by plant/region, one trend that remains prevalent is that, over the mid- to long-run, production and delivery numbers don’t significantly diverge. In other words, inventories tend to run pretty low and the mapping of regional demand by platform is quite efficient.

Between „China+“ (signifying China retail sales and China-origin exports together) and ex-China facilities, deliveries had typically run close to 1.1-1.2 to 1. As of H1 2025, ex-China deliveries outpace „China+“ deliveries by 0.35%. From 84% U.S. consumption of its ex-China deliveries, it is estimated that this had slipped down to 78% in Q1 2025. Given that Giga Berlin – which only produces the cheaper Model Y (along with drivetrains and other subsystems) – had delivered its 500,000th EV¹ by the end of March this year, this drop could be construed as the ex-China facilities growing in strength and contribution. On the other hand, the China retail (i.e. domestic sales) composition of its „China+“ facility had risen from 62% in 2022 to 78% in Q1 2025, which implies that exports are flagging and indicates rising competition: while Tesla might have a „homegrown innovator“ advantage for consumers in the U.S., this doesn’t apply in other car markets. Falling sales volumes makes this more and more apparent.

However, there is one stark standout that stands out: as of Q1 2025, ex-China deliveries were trending at a 28% decline relative to 2024 while China retail was trending at a 20% decline. With Q2 2025 registering a 17% uptick in ex-China deliveries over Q1 2025, ex-China deliveries are now trending at a 18% decline as of H1 2025. Given Mr. Elon Musk’s close association with the Trump administration (until a rather spectacular end very recently), there have been strident campaigns against buying Teslas both within the United States as well as the rest of the Western Hemisphere along with bouts of violence against both Tesla owners and dealerships. The near-halving of the decline trend in 2025 here, despite a plethora of options available to buyers, indicates that this might not have been successful. In fact, it might have had the exact opposite effect.

Maybe „cancel culture“ has been cancelled?

Official China retail numbers – that effectively separate out exports from domestic sales – aren’t available yet but „China+“ deliveries are trending to be down 22% from 2024, wherein it delivered over 916,000 vehicles. In the month of June, China+ deliveries effectively reversed eight straight months of year-on-year declines² to register a small uptick. With near-parity in current delivery/production trends between East and the West in 2025 and slightly lesser underperformance in the West despite the opposition (both from politics and the market), this might be a bottom from which the company either rises or doesn’t fall quite as much as prognosticated.

However, it is a fact that – despite a trending decline in the U.S. EV market – Tesla’s relative lack of freshness in delivering fresh new models to pique consumer interest means that the company has much to lose while competing brands entering the market with relatively newer models have much to gain. These competing brands have strong performance in other markets in Europe as well as China (along with proximate regions).

Tesla’s decision to veer into autonomous driving is a potentially rich new vein to tap into, given the perhaps-inevitable continued loss of market share. Some estimates for its nearest U.S. rival – Waymo – assign a price tag of nearly $250,000³ for a car to be made fully autonomous. The initial Robotaxi launch in Austin (Texas) utilizes the existing Model Y with little by way of additional hardware. If this is the template that will be followed for full-scale rollout, there’s potentially anywhere between a 300% to 400% price advantage over the existing competition. For potential Robotaxi fleet operators, this is a massive incentive.

On the other hand, the aforementioned „spectacular end“ to Mr. Musk’s „buddy“ relationship with the Trump administration over President Trump’s „One Big Beautiful Bill Act“ has raised a worrying prospect to some: a threat to end an estimated $38 billion (till date) in subsidies to Musk’s companies⁴. Mr. Musk replied⁵, „I am literally saying CUT IT ALL. Now.“ (presumably meaning all subsidies being given out by the government)

While the Bill – which narrowly passed through both the House and Senate on the 3rd of July – axes EV tax credits, it also currently has a provision⁶ that lets car buyers write off up to $10,000 a year in interest paid on qualifying auto loans taken out between 2025 and 2028 for the purchase of cars assembled in the US. Tesla is a decidedly American carmaker with facilities and only a small portion of buyers can be assumed to be buying Teslas in cash. This means that Tesla buyers stand to benefit in savings even if EV tax credits are erased.

Be it Musk or Tesla, there is plenty to pooh-pooh for some – perhaps even justifiably sometimes. But, nonetheless, Tesla’s earnings call on the 22nd of July would likely be one to watch for. If there are updates about Robotaxi deployments and/or a fresh new model, this would likely be yet another bullish signal.

While some might see the facts presented as net positives (as the stock’s present conviction seems to indicate), there are also numerous factors riding against it. The automotive industry has never been a sprint; it’s a marathon. And Tesla – like its boss – remains oh-so-interesting.

In the leadup to the earnings call, professional investors with access to European exchanges and a tactical bent of mind might want to consider the 3X Tesla ETP (TSL3) during upsides of the stock’s trajectory and the -3x Short Tesla ETP (TS3S) during the downsides.

Another method of buying into Tesla’s trajectory to potentially generate income is the Tesla Options ETP (TSL), which generates monthly income by buying Tesla shares, selling up to 5% ‘out-of-the-money’ (OTM) weekly call options on Tesla and paying a return on the premia collected. As of the 3rd of July 2025, its Distribution Yield is 75.82%.

Footnotes:

1. „Tesla Giga Berlin hits new milestone by producing 500,000th Model Y“, Teslarati, 31 March 2025
2. „Tesla China sells 71,599 cars in Jun, reversing 8 straight months of year-on-year declines“, CNEVPost, 2 July 2025
3. „What it really costs to turn a car into a self-driving vehicle“, Quartz, 21 July 2022
4. „Trump says DOGE ‚might have to go back and eat‘ Elon Musk after his criticism of the GOP bill“, NBC News, 1 July 2025
5. „Trump threatens to set Doge on Musk as pair feud again over budget plan“, BBC News, 1 July 2025
6. „Car buyers have a lot riding on the ‚Big, Beautiful Bill'“, TheStreet, 1 July 2025