At a Glance
- Tesla delivered 1.64 million cars in 2025, a 9% drop from 2024.
- Chinese rival BYD sold 2.26 million vehicles, overtaking Tesla.
- Sales slump driven by lost tax credit, political backlash, and rising competition.
- Why it matters: The shift signals a turning point in the global EV market and impacts investor sentiment.
Tesla’s dominance as the world’s best-selling electric-vehicle maker fell on Friday when the company reported a 9% decline in 2025 sales, handing the top spot to China’s BYD. The downturn followed a customer backlash over the CEO’s politics, the expiration of a U.S. tax credit and fierce competition from overseas makers.
Sales Decline and Market Shift
Tesla delivered 1.64 million vehicles in 2025, down 9% from the previous year, and its fourth-quarter sales totaled 418,227, missing the reduced target of 440,000. The drop came after the $7,500 electric-vehicle tax credit expired in September, a key incentive for buyers.
- BYD sold 2.26 million vehicles last year, becoming the largest EV maker.
- Tesla’s stock fell 2.6% to $438.07 on Friday.
- Despite the slump, the company’s shares gained about 11% over the year.
New Models and Future Strategy
Tesla introduced stripped-down versions of its Model Y and Model 3 in October, priced just under $40 k and $37 k respectively, to compete with cheaper Chinese models in Europe and Asia.
| Model | New Price |
|---|---|
| Model Y | <$40 k |
| Model 3 | <$37 k |
Robotaxi Ambitions and Regulatory Hurdles
The company is testing a driverless robotaxi service in Austin, first with safety monitors and then without them, aiming for multi-city rollout this year. However, Tesla faces competition from Waymo and regulatory challenges, including federal safety investigations and a California licensing risk.
Dan Ives said:
> “Regulatory is going to be a big issue,”
> “We’re dealing with people’s lives.”
- Musk expects software updates to enable full autonomy by year-end.
- Tesla plans to produce its AI-powered Cybercab with no steering wheel in 2026.
- Musk received a new pay package approved by shareholders in November.
Key Takeaways
- Tesla’s sales fell 9% in 2025, losing its top spot to BYD.
- New, cheaper Model Y and Model 3 variants aim to revive sales.
- The company is pivoting toward autonomous technology and robotaxis amid regulatory scrutiny.
While Tesla’s sales slump and political controversies weigh on the brand, its focus on autonomous tech and new product pricing may signal a strategic pivot as it seeks to regain market leadership.
