Tesla’s annual sales drop 9% as it is overtaken by BYD as global EV leader | TechCrunch

Tesla’s annual sales fell for the second year in a row, a decline fueled by the elimination of the US federal tax credit and competition from Chinese automakers.

Tesla delivered 1.63 million vehicles worldwide in 2025, down 9% from 1.79 million in 2024, figures show released by the company. Notably, approximately 50,850 of these vehicles are considered “other models,” a collection that includes the Cybertruck as well as its older Model X and Model S.

Tesla reported fourth-quarter sales of 418,227, down 15.6% from the same period last year and much more than analysts expected. Shares of Tesla fell more than 2% as the market opened after the New Year’s holiday.

Tesla, once the global leader in electric vehicle sales, has seen its market share in Europe and China eroded by the rise of Chinese competitors. The Chinese BYD, that one 2.26 million electric vehicles delivered by 2025, now holds the largest global EV sales position. Tesla also faces increased competition in the United States, but especially from Chinese automakers, which are banned from selling cars in the country.

But it was the elimination of the $7,500 US federal tax stimulus that appears to have dealt the biggest blow in the fourth quarter. Tesla sold a record 497,099 vehicles in the third quarter — up 29% from the previous quarter — as consumers rushed to buy electric vehicles before the federal EV tax credit disappeared. Since then, sales have slumped despite efforts to recruit buyers.

Tesla’s declining sales come as CEO Elon Musk tries to steer the company away from making and selling electric cars and toward AI and robotics. Musk’s argument is that there is money to be made in “sustainable abundance,” a slogan used in the company’s recent publications. Master Plan IV that describes an ecosystem of sustainable products, from transportation to energy generation, battery storage and robotics.

And yet the majority of Tesla’s revenue comes from its EV business. Tesla, for example, generated $28 billion in revenue in the third quarter, of which $21.2 billion came from electric vehicle sales.