Tesla annual sales fall 9% as BYD overtakes it as global EV leader
The sales decline comes as chief executive Elon Musk attempts to pivot Tesla away from primarily making and selling electric vehicles towards artificial intelligence and robotics.
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Tesla’s global vehicle sales declined for the second consecutive year in 2025, underscoring mounting pressure from intensifying competition and policy changes. The electric vehicle maker has also lost its position as the world’s largest EV seller to China’s BYD. The downturn comes as the company attempts to reposition itself beyond car manufacturing.
Tesla delivered 1.63 million vehicles worldwide in 2025, marking a 9% fall from 1.79 million units in 2024, according to figures released by the company. Of the total deliveries, around 50,850 vehicles were categorised as other models, which include the Cybertruck alongside the older Model X and Model S.
The company reported fourth-quarter deliveries of 418,227 vehicles, representing a 15.6% decline compared with the same period last year and a sharper drop than analysts had anticipated. Tesla shares fell more than 2% at market open following the New Year holiday, as per market data.
According to reports, Tesla, which once led global EV sales, has seen its market share eroded in Europe and China amid growing competition from Chinese manufacturers. BYD delivered 2.26 million electric vehicles in 2025, overtaking Tesla to become the world’s largest EV seller. Tesla is also facing increasing competition in the United States, although Chinese automakers remain barred from selling vehicles in the country.
The removal of the $7,500 federal EV tax credit in the United States appears to have had the most significant impact on fourth-quarter sales, according to reports. Tesla recorded a record 497,099 deliveries in the third quarter, a 29% increase from the previous quarter, as buyers rushed to purchase electric vehicles before the incentive expired. Sales have since retreated despite the company’s efforts to attract customers.
The sales decline comes as chief executive Elon Musk attempts to pivot Tesla away from primarily making and selling electric vehicles towards artificial intelligence and robotics. Musk has promoted the concept of sustainable abundance, a theme central to the company’s recently outlined Master Plan IV, which envisions an ecosystem spanning transportation, energy generation, battery storage and robotics.
Despite this strategic shift, the electric vehicle business continues to account for the majority of Tesla’s revenue. In the third quarter, the company reported revenue of $28 billion, of which $21.2 billion was generated from vehicle sales.
