Tesla has lost its crown as the world’s bestselling electric vehicle maker.
The US firm faced a difficult year with unease over chief executive Elon Musk’s political activities and stiff overseas competition that pushed sales down for a second year in a row.
Tesla said that it delivered 1.64 million vehicles in 2025, a decrease of 9% from a year earlier.
Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.
Tesla cars. Pic: AP
Tesla sales totalled 418,227 between October and December, falling short of the 440,000 that analysts polled by FactSet expected.
The sales total may have been hit by the end of a $7,500 (£5,500) tax credit phased out by the Trump administration at the end of September.
Despite this Tesla stock finished 2025 with a gain of approximately 11%. Investors hope Musk can deliver on his ambitions to make the company a leader in robotaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices.
Shares of Tesla rose almost 2% before the opening bell on Friday, with stock mostly unchanged at $450.27 in early trading.
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The latest quarter was the first with sales of stripped-down versions of the Model Y and Model 3 that Musk unveiled in early October as part of an effort to revive sales.
The new Model Y costs just under $40,000 (£30,000) while customers can buy the cheaper Model 3 for under $37,000 (£27,000).
The new versions are aimed at helping Tesla to compete with Chinese models in Europe and Asia.
For fourth-quarter earnings coming out in late January, analysts are expecting the company to post a 3% decrease in sales and a nearly 40% drop in earnings per share, according to FactSet.
Analysts expect the downward trend in sales and profits to eventually reverse itself further into 2026.
In November, Musk won a shareholder vote that will see him net a $1trn (£742bn) pay package if the firm meets a series of extremely ambitious performance targets over the next 10 years.
Already the world’s richest man, he scored another huge windfall last month when the Delaware Supreme Court reversed a decision that deprived him of a $550bn (£408bn) pay package that Tesla gave him in 2018.
