Tesla July Sales Dip 8.4% as EV Maker Awards Elon Musk $29 Billion Worth of Shares

July sales of Tesla’s China-made electric vehicles dropped by 8.4% compared to the previous year. According to Reuters, the sales dipped amid growing competition from Chinese EV makers that now offer lower-priced models. Tesla has also approved an award of $29 billion in shares to its CEO, Elon Musk.

Tesla’s Model Y and Model 3 Sales

Last month, Tesla delivered 67,886 units of its China-made Model Y and Model 3 vehicles to Europe and other markets. This represents a 5.2% drop from the deliveries the company made in June, according to China Passenger Car Association data.

Tesla’s July sales drop in China came after the company recorded a 0.8% increase in its Chinese manufactured EV sales in June. Although these sales did not stop the company’s quarterly sales declines, it ended an 8-month loss stretch.

Tesla’s biggest EV rival in China BYD sold 341,300 vehicles in July. The sales mostly featured its Dynasty and Ocean EV and plug-in hybrids. In quarter 2 of 2025, the US EV manufacturer posted the highest quarterly sales decline in more than a decade.

Shrinking Demand for Tesla EVs

Tesla has been struggling with shrinking demand following a consumer backlash over Musk’s far right political views that have alienated potential buyers. Tesla’s global sales have also been affected by growing competition and the company’s aging vehicle line-up and liberation day tariffs introduced by the US government in April this year.

The situation worsened after the US government reduced subsidies for electric vehicles. Speaking during Tesla’s earnings call last month, Musk said that the waning subsidies may result in several rough quarters for the EV maker before revenue from its services, including its driver assistance software, starts streaming in late 2026.

According to data from research company S&P Global Mobility, Tesla’s brand loyalty has dropped since Musk announced support for US President Donald Trump last year. Tesla has been working to grow its influence in the humanoid robot and robotaxi industry. In the month of May, Tesla commenced Model Y tests in Austin, Texas as part of its plan to venture into the robotaxi industry.

Tesla is also developing a cheaper version of its Model Y EV. The Chinese auto industry has been experiencing price wars that have hurt vehicle makers, dealers. Despite this, Tesla is preparing to introduce a 6-seater version of Model Y in the Chinese market. The company also plans to launch a Model 3 with rear-wheel drive in the market.

New Shares Approved for Elon Musk

As Tesla struggles with a reducing market share, the company has moved to strengthen Musk’s position in the company by granting him 96 million new shares valued at $29 billion.

The move to allocate Musk new shares is aimed at keeping him at the helm of the company as he struggles to fight a ruling that nullifies his initial pay deal after a Delaware court deemed it unfair to shareholders. Musk holds a 13% stake in the EV maker, making him the largest shareholder.
The company is currently at a turning point as it shifts its focus from affordable EVs to humanoid robots and robotaxis in a bid to position itself as an AI and robotics company. The latest share award is also aimed at enhancing Musk’s voting power in the company.

“While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, we are confident that this award will incentivize Elon to remain at Tesla,” the company’s regulatory filing read in part.
The filing also stated that the new shares awarded to Musk would be offset or forfeited if the courts reinstate the 2018 CEO Performance Award. The shares award would also be valid only if Musk maintains his executive role up to 2027.