Tesla’s global car sales fell sharply in the second quarter, continuing a decline that began last year, as the company puts a greater emphasis on autonomous driving instead of new models aimed at attracting car buyers.

The company said it delivered 384,000 vehicles from April through June, down from 444,000 a year earlier. Tesla’s limited and aging lineup has not been able to withstand growing competition from relatively young Chinese carmakers like BYD and established Western companies like General Motors, Volkswagen and BMW.

Elon Musk, Tesla’s CEO, has been seemingly indifferent to slumping vehicle sales, saying the company’s future lies with technology that will allow Teslas to operate autonomously and function as driverless taxis. Significant numbers of investors have bought into that vision and pushed up Tesla’s stock market valuation to more than $940 billion.

Wall Street had expected a decline in sales and Tesla shares rose in early trading Wednesday.

Last month, Tesla began a closely watched test of Musk’s self-driving ambition. Specially equipped Model Y sport utility vehicles, which it calls Robotaxis, began offering paid rides to handpicked guests in Austin, Texas.

The guest riders, mostly Tesla enthusiasts with many social media followers, posted almost uniformly glowing reviews online. However, videos they shot betrayed some flaws in the technology, including instances when the cars braked suddenly, dropped off passengers in the middle of intersections, or required intervention from safety monitors who rode in the front passenger seats.

Last week, in another milestone, a Tesla with nobody inside drove itself from the company’s factory in Austin to a customer about half an hour away. “There were no people in the car at all and no remote operators in control at any point. FULLY autonomous!” Musk wrote on the social platform X. Critics noted that videos posted by Tesla showed the car parking at the destination along a curb painted red and marked, “No Parking Fire Lane.”

Slumping car sales are certain to weigh on Tesla’s profit. The company is already close to losing money. The company would have reported a loss in the first quarter if not for the $447 million it earned from selling clean air credits to rivals whose vehicles exceeded pollution limits. The Trump administration is trying to eliminate those credits.

The sales numbers suggest that Tesla factories are operating well below potential, a further drain on profit. Tesla factories in California, Texas, China and Germany are capable of producing 2.35 million cars a year, according to the company, or about 590,000 per quarter. During the first quarter, Tesla produced 362,615 cars, meaning the factories were operating at about 62% of their capacity.

Production increased in the second quarter, Tesla said Wednesday, suggesting that factories were operating at 70% capacity. But lines that produce the Cybertruck pickup, the Model S luxury sedan and Model X SUVs appear to be operating well below their potential.

Tesla is capable of producing 225,000 of those models a year, according to company figures, or about 56,000 per quarter. In the second quarter, Tesla produced just 13,400.

Tesla has said it will begin producing a lower-cost model by the end of June, but it has not yet displayed a prototype or said when it would go on sale.

The average capacity utilization rate in the United States for the auto industry, including suppliers, is 65%, according to the Federal Reserve Bank of St. Louis. That is well below levels analysts consider healthy.

Automakers have certain fixed costs like maintenance, taxes, loan interest and energy. As a result, factories that are not churning out a lot of cars typically earn modest profits or lose money.

Unused capacity may be an especially big problem for Tesla because its production is highly automated and depends on costly machinery that requires maintenance and loses value over time, said Ferdinand Dudenhöffer, director of the Center Automotive Research in Bochum, Germany.

“You can’t lay off machines,” he said.

Data available before Wednesday had already signaled trouble for Tesla, whose share price has dropped about 20% this year.

In Britain and continental Europe, registrations of new Tesla cars fell 28% in May.

In the United States, Tesla sales fell 21% in the second quarter.