Tesla sold 384,122 cars in the second quarter, down nearly 60,000 cars, or 13.5% from the sales total a year ago. This marks the largest year-over-year drop in sales in Tesla’s history, although it is up 14.1% from its first quarter total.

Industry registration data indicates that both US and European sales have fallen sharply, despite an overall increase in electric vehicle (EV) sales in both markets. Tesla also faces increased competition, not only from legacy Western automakers but also from Chinese manufacturers. This competition has significantly impacted Tesla’s sales in China, the largest market for both EVs and auto sales, and Tesla’s second-largest market.

Tesla is poised to lose its title as the world’s largest EV maker based on annual sales to Chinese automaker BYD, even though BYD does not sell cars in the US market. BYD has reported it has sold one million EVs in the first half of this year, exceeding Tesla’s year-to-date total of around 721,000 units.

Analysts point out that while Tesla has recently given its popular Model Y an update, it lacks a more affordable product offering – which has created an opportunity for rivals such as BYD, especially in China. BYD also sold more fully electric cars in Europe than Tesla for the first time ever in April.

There are also suggestions that high-profile political activity in the US from CEO Elon Musk has also kept potential Tesla buyers away.