Tesla’s sales have declined again as more automakers enter the electric vehicle market.

Tesla’s sales have declined for the second consecutive quarter, marking the first time in the company’s history that sales have decreased year-over-year for two quarters in a row. The recent quarter saw sales of nearly 444,000 cars, a 5% drop from the previous year, which is an improvement over the 8.5% decline in the first quarter. This downturn highlights the growing competition in the electric vehicle (EV) market.

Despite the decline, Tesla’s sales surpassed analysts’ forecasts of 436,000 vehicles, maintaining its lead over Chinese automaker BYD in global EV sales. BYD reported 426,000 EV sales, a 21% increase from the previous year, narrowing the gap with Tesla. Tesla’s better-than-expected sales lifted its stock by over 9% in midday trading, though shares are still down about 8% year-to-date.

Tesla has been reducing prices for more than a year to counter growing competition from traditional automakers like Volkswagen, General Motors, and Ford, who are expanding their EV offerings. These price cuts have supported sales but have reduced profit margins. Tesla will report its second-quarter financial results on July 23.

General Motors (GM) reported a 40% increase in US EV sales year-over-year and a 34% increase from the first quarter, totaling about 22,000 vehicles, despite discontinuing its best-selling EV, the Bolt. Toyota’s US EV sales surged by 301% to 11,600 units. However, both GM and Toyota’s sales are still a fraction of Tesla’s.

Tesla’s filings suggest that 43% to 49% of its automotive sales revenue comes from US sales, indicating that about 190,000 of the cars delivered in the quarter were to US customers. This is significantly higher than the combined US sales of GM and Toyota.

The increased competition is impacting Tesla’s sales, as its vehicle lineup ages. The Model S, launched in 2012, and the Model Y, introduced in 2019, have seen little change. The recently launched Cybertruck has faced quality issues, with several recalls including problems with the windshield wiper, truck bed trim, and accelerator pedal.