Liberty Case

New York, USA – Tesla has lost its position as the world’s bestselling electric vehicle (EV) manufacturer, after a second consecutive year of falling sales driven by intensifying global competition and a customer backlash linked to the political views of its chief executive.

Tesla said it delivered 1.64 million vehicles in 2025, a decline of 9% compared with the previous year. The drop marks another setback for the company as it faces slowing demand in key markets and growing pressure from lower-cost rivals, particularly in Asia and Europe.

Chinese competitor BYD sold 2.26 million vehicles last year, overtaking Tesla to become the world’s largest EV maker. BYD’s rise highlights China’s expanding dominance in the global EV sector, supported by aggressive pricing, a broad model lineup, and strong domestic demand.

Tesla’s fourth-quarter performance also disappointed investors. The company delivered 418,227 vehicles during the period, well below the roughly 440,000 expected by analysts surveyed by FactSet. Analysts said sales were likely hit by several factors, including the expiration of a $7,500 U.S. federal tax credit that was phased out by the Trump administration at the end of September, making Tesla vehicles more expensive for some buyers.

Despite the weaker sales figures, Tesla’s stock finished 2025 with a gain of around 11%. Investor confidence has been supported by expectations that CEO Elon Musk can steer the company toward new growth areas beyond traditional car sales. Shares rose nearly 2% ahead of Friday’s market open, reflecting continued optimism about Tesla’s long-term strategy.

During the fourth quarter, Tesla began selling stripped-down, lower-cost versions of its Model Y and Model 3, which Musk unveiled in early October as part of an effort to revive demand. The new Model Y is priced just under $40,000, while the cheaper Model 3 costs under $37,000. These models are expected to help Tesla compete more effectively with Chinese EVs, particularly in Europe and Asia, where price sensitivity is higher.

Looking ahead, analysts expect Tesla’s fourth-quarter earnings report, due in late January, to show a 3% decline in sales and nearly a 40% drop in earnings per share, according to FactSet. Many analysts, however, believe the downward trend could begin to reverse as 2026 progresses, especially if interest rates ease and new products gain traction.

Investors have largely shrugged off the recent decline in vehicle sales, choosing instead to focus on Musk’s pivot toward other parts of the business. Musk has repeatedly said that slowing car sales matter less to Tesla’s future, arguing that the company’s long-term value lies in its driverless robotaxi ambitions, its growing energy storage business, and the development of humanoid robots designed to perform basic tasks in homes and factories.

Musk recently received another boost after a court decision revived his massive 2018 compensation package, potentially worth $55 billion. He has also fueled speculation that he could become the world’s first trillionaire if his rocket company SpaceX goes public later this year in what analysts expect would be a blockbuster initial public offering.

For now, Tesla faces a challenging transition period, balancing near-term pressure on its core EV business with ambitious bets on emerging technologies that could redefine the company’s future.

SOURCE : AP NEWS |  Follow Us: Facebook | Instagram | Twitter | Youtube |