Tesla has recently lost its status as the top electric vehicle maker globally. In 2025, the company delivered 1.64 million vehicles, a drop of 9% from the previous year. Meanwhile, Chinese competitor BYD surged ahead, boasting sales of 2.26 million vehicles, making it the new leader in the market.
In the fourth quarter alone, Tesla sold 418,227 vehicles, undercutting analyst expectations of 440,000. The impact of the recently expired $7,500 tax credit, which was phased out last September, played a role in this downturn.
Despite these challenges, Tesla stock remained stable, starting at $450.27. Investors are still optimistic about CEO Elon Musk’s vision for the future, including plans for a robotaxi service and humanoid robots aimed at home and office tasks. This forward-thinking approach helped the stock gain about 11% by the end of 2025.
To revitalize sales, Tesla recently introduced more affordable versions of the Model Y and Model 3. The Model Y now costs just under $40,000, and the Model 3 is priced below $37,000. These budget-friendly options are crucial for competing with lower-priced models from competitors in Europe and Asia.
Looking ahead, analysts predict a 3% decline in Tesla’s sales and a nearly 40% drop in earnings per share for the upcoming fourth-quarter earnings report due at the end of January. However, many believe these declines might reverse by 2026.
In the meantime, Musk has reshaped the company’s narrative, emphasizing the importance of its new directions over car sales. He argues that innovations in robotaxi services, energy storage, and robotics are vital for Tesla’s long-term success. This shift has been supported by Tesla’s board, who recently granted Musk a significant pay package. In addition, Musk regained a substantial $55 billion pay package previously denied to him, showcasing his influential position.
As the automotive landscape evolves, Tesla faces stiff competition and internal challenges, but Musk’s ambitious plans keep investors hopeful. With the electric vehicle market booming—global sales are projected to reach over 30 million by 2030—Tesla’s next moves will be crucial in maintaining its significance in this fast-changing industry.
For more insights on electric vehicle trends, check out the International Energy Agency’s report.
