Tesla has been dethroned as the top electric vehicle (EV) manufacturer globally due to declining sales for the second consecutive year, driven by customer dissatisfaction with Elon Musk’s political stance and increased competition from overseas. The company reported a 9% decrease in deliveries in 2025, amounting to 1.64 million vehicles, falling short of the previous year’s figures.
In contrast, Chinese competitor BYD emerged as the new leader in EV sales, having sold 2.26 million vehicles in the same period. Tesla’s sales for the fourth quarter of 2025 totaled 418,227 units, below the 440,000 anticipated by analysts polled by FactSet. A contributing factor to this shortfall could be linked to the conclusion of a $7,500 US tax credit phased out by the Trump administration in September.
Despite facing various challenges, Tesla’s stock closed the year with an approximately 11% increase, buoyed by investor optimism in Elon Musk’s vision to position Tesla as a pioneer in the robotaxi industry and introduce humanoid robots for domestic and commercial tasks. Prior to market opening on Friday, Tesla shares saw an almost 2% increase.
The shifting landscape in the EV market underscores the evolving dynamics of the industry, with Tesla facing hurdles while striving to capitalize on emerging technologies and consumer trends.
