Tesla annual gross sales decline 9% because it’s overtaken by BYD as international EV chief

Tesla annual gross sales have fallen for the second yr in a row, a drop fueled by the removing of the federal tax credit score within the U.S. and competitors from Chinese language automakers.

Tesla delivered 1.63 million automobiles globally in 2025, a 9% fall from 1.79 million in 2024, in line with figures launched by the corporate. Notably, about 50,850 of these automobiles are thought-about “different fashions,” a set that features the Cybertruck in addition to its older Mannequin X and Mannequin S.

Tesla reported fourth-quarter gross sales of 418,227, a 15.6% drop from the identical interval final yr and way over analysts anticipated. Tesla inventory fell greater than 2% because the market opened after the New Yr vacation.

Tesla, as soon as the worldwide EV gross sales chief, has seen its market share in Europe and China eroded by the rise of Chinese language rivals. China’s BYD, which delivered 2.26 million EVs in 2025, has now taken the highest international EV gross sales spot. Tesla can be dealing with extra competitors in the US — though notably not from Chinese language automakers that are barred from promoting automobiles within the nation.

But it surely was the elimination of the $7,500 U.S. federal tax incentive that appears to have delivered the largest blow within the fourth quarter. Tesla bought a record-breaking 497,099 automobiles within the third quarter — a 29% enhance from earlier quarter — as shoppers raced to purchase EVs earlier than the federal EV tax credit score disappeared. Since then, gross sales have retreated despite efforts to woo consumers.

Tesla’s declining gross sales comes as CEO Elon Musk tries to pivot the corporate away from the enterprise of constructing and promoting EVs and in the direction of AI and robotics. Musk’s pitch is there may be cash to be made in “sustainable abundance,” a catchphrase used all through the corporate’s current Grasp Plan IV that describes an ecosystem of sustainable merchandise, from transport to power technology, battery storage and robotics.

And but, the majority of Tesla’s earnings comes from its EV enterprise. As an example, Tesla generated $28 billion in income within the third quarter, of which $21.2 billion got here from promoting EVs.