Due to a customer backlash against Elon Musk’s right-wing views and fierce international competition, Tesla lost its title as the world’s best-selling electric vehicle manufacturer on Friday.
This was the company’s second consecutive year of declining sales.
According to Tesla, it delivered 1.64 million cars in 2025, a 9% decrease from the previous year.
The largest EV manufacturer is now the Chinese competitor BYD, which sold 2.26 million cars last year.
Sales for the fourth quarter came in at 418,227, less than the 440,000 predicted by FactSet’s survey of analysts.
The Trump administration’s phase-out of a $7,500 tax credit at the end of September affected the sales total.
At $450.27 in early trading on Friday, Tesla’s stock remained almost unchanged.
Investors are wagering that Tesla CEO Musk can fulfill his goals of making Tesla a leader in robotaxi services and persuading customers to accept humanoid robots that can carry out routine jobs in homes and businesses, despite the company’s numerous problems.
The stock ended 2025 with a gain of almost 11%, reflecting that optimism.
In an attempt to boost sales, Musk announced stripped-down versions of the Model Y and Model 3 in early October, which were sold during the most recent quarter for the first time.
Customers can purchase the less expensive Model 3 for less than $37,000, while the new Model Y costs a little less than $40,000.
It is anticipated that those variants will enable Tesla to compete with Chinese models in Asia and Europe.
According to FactSet, analysts anticipate a 3% decline in sales and a nearly 40% decline in earnings per share for the company’s fourth-quarter earnings, which will be released in late January.
As 2026 progresses, analysts anticipate that the declining trend in sales and profitability will eventually reverse itself.
Investors have mostly ignored the declining numbers in favor of concentrating on Musk’s shift to other areas of the company.
He has been claiming that the company’s future is more focused on developing robots for the home and factory, the company’s energy storage business, and his new autonomous robotaxi service than it is on declining car sales.
To make his work worthwhile, Musk received a potentially massive new compensation package from Tesla’s directors, which shareholders supported during the company’s November annual meeting.
Two weeks ago, the Delaware Supreme Court overturned a ruling that denied Musk a $55 billion compensation package that Tesla had given him in 2018, giving him yet another enormous windfall.
Musk is currently the richest man in the world.
