Tesla ceded its crown as the world’s top electric vehicle (EV) maker to China’s BYD after annual sales fell for a second year, with intensifying competition, the expiration of US tax credits and damage to the carmaker’s brand hurting demand. With global EV sales rising 28% last year, BYD outsold Tesla for the first time on an annual basis, helped by rapid growth in Europe where the Chinese carmaker has been widening its lead over the US rival. The annual deliveries figure raises questions about whether Tesla can stabilise its core auto business following two consecutive years of sales declines, even as it pivots to futuristic projects such as robotics and self-driving cars to justify its steep valuation.
“I think the market remains focused on the robotaxi business, where Tesla is testing its Cybercab in Austin,” said Seth Goldstein, senior equity research analyst at Morningstar. “If deliveries can continue to not be down too much in the coming quarters, I expect market sentiment around the robotaxi will continue to drive the stock,” Goldstein added. Tesla’s fourth-quarter figures come after third-quarter deliveries were supported by a rush to lock in US EV tax credits before they expired at the end of September, followed by a sharper slowdown as incentives rolled off.
Tesla said it delivered 418,227 vehicles in the October–December quarter, down 15.6% from 495,570 a year earlier. Analysts expected 434,487 vehicles or a 12.3% drop, according to Visible Alpha. For the full year, Tesla delivered 1.64-million vehicles, compared with 1.79-million in 2024.
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Analysts polled by Visible Alpha had expected deliveries of about 1.65-million vehicles, marking the company’s second consecutive annual decline. Analysts have said Tesla came under immense pressure in 2025 in North America and Europe, where competition intensified and the company faced brand backlash due to CEO Elon Musk’s political rhetoric. Growing competition from Chinese firms and European automakers such as Volkswagen and BMW has weighed on Tesla’s sales momentum.
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