Tesla lost its crown as the world’s best-selling electric car maker on Friday due to a customer revoltElon Musk’s right-wing politicsthe expiration of US tax breaks for buyers and fierce foreign competition pushed sales down for the second year in a row.
Tesla said it delivered 1.64 million vehicles in 2025, down 9% from a year earlier.
Chinese rival BYD, which sold 2.26 million vehicles last year, is now the largest EV manufacturer.
It’s a stunning turnaround for Musk, who once dismissed BYD as a threat as Tesla’s rise seemed unstoppable. This crushed traditional car manufacturers with far more resources and made him the richest man in the world.
For the fourth quarter, sales were 418,227, less than the 440,000 expected by analysts polled by FactSet. The sales total was affected by the expiration of $7,500tax credit that was phased outby the Trump administration in late September.
Tesla shares rose 0.5% to $451.60 on Friday.
Even as multiple problems plague the company, investors are betting that Tesla CEO Musk can achieve his ambitions to make Tesla an industry leader.robotaxi serviceand getting consumers to embrace ithumanoid robotswho can perform basic tasks in homes and offices. Reflecting that optimism, the stock ended 2025 with a gain of about 11%.
The latest quarter was the first to see sales of stripped-down versions of the Model Y and Model 3 that Musk unveiled in early October as part of an effort to revive sales. The new Model Y costs just under $40,000, while customers can buy the cheaper Model 3 for less than $37,000. These versions are expected to help Tesla compete with Chinese models in Europe and Asia.
For its fourth-quarter earnings results due in late January, analysts expect the company to post a 3% decline in revenue and a nearly 40% decline in earnings per share, according to FactSet. Analysts expect the downward trend in sales and profits to eventually reverse as 2026 progresses.
Investors have largely shrugged off the declining numbers, choosing to focus on Musk’s pivot into different parts of the business community.
He has said that declining car sales don’t matter as much now because the company’s future lies more in its new self-driving robotaxis service, the company’s energy storage business and building robots for the home and factory. To make his job worthwhile, Tesla executives awarded Musk a potentially huge rewardnew pay package that the shareholders supportedduring the annual meeting in November.
Musk scored another huge windfall two weeks ago when the Delaware Supreme Court reversed a decision that stripped him of a $55 billion pay package Tesla handed out in 2018.
Musk could become the world’s first trillionaire later this year when he sells shares of his rocket company SpaceX to the public for the first time in what analysts say would be a blockbuster initial public offering.
This story has been corrected to show that BYD sold 2.26 million vehicles last year, not 2.26.
—Associated Press
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