Tesla sales have roared back after demand in Europe rebounded following a backlash against Elon Musk’s foray into politics.

The electric car giant delivered 480,126 vehicles in the second quarter – a record for that time of year and up 25 per cent year-on-year.

The surge was seen as a sign the firm is firing on all cylinders once again after two years of decline.

The recovery was driven by improving demand in Europe, where Tesla bounced back after a sharp slump last year amid controversy over Musk’s political activities, including a job in Donald Trump’s administration.

But while car sales are improving, investors are increasingly looking at Tesla’s long-term ambitions in autonomous driving, artificial intelligence and robotics.

There is also speculation that Musk will merge Tesla with his rocket firm SpaceX, which joined the stock market in New York last month in a record-breaking initial public offering. 

Last night, Tesla shares fell 7 per cent while SpaceX rose 3 per cent.