NEW YORK (AP) — Tesla lost its crown as the world’s best-selling electric vehicle maker on Friday as a customer revolt over Elon Musk’s right-wing politics, the expiration of a U.S. tax break for buyers and tough foreign competition dragged down sales for a second year in a row.
Tesla said it will deliver 1.64 million vehicles in 2025, down 9% from a year ago.
Chinese rival BYD, with 2.26 million vehicles sold last year, is now the largest EV maker.
It’s a stunning reversal for a car company whose growth once seemed unstoppable as it overtook traditional automakers with more resources and helped make Musk the world’s richest man. Sales fell despite President Donald Trump’s marketing efforts early last year when he called a press conference to praise Musk as a “patriot” in front of a Tesla in the White House driveway, then announced he would buy one, an example of a president not endorsing the products of private companies.
For the fourth quarter, Tesla’s sales totaled 418,227, well below the 440,000 target that analysts recently polled by FactSet. Sales were hit hard at the end of September when the Trump administration phased out a $7,500 tax credit for electric vehicle purchases.
Tesla stock fell 2.6% to $438.07 on Friday.
Even as a number of issues buffet the company, investors are claiming Tesla CEO Musk can fulfill his ambitions to make Tesla a leader in robottaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices. Reflecting that optimism, the stock ended 2025 with gains of nearly 11%.
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 less than $40,000, while customers can buy the cheaper Model 3 for less than $37,000. Those versions are expected to help Tesla compete with Chinese models in Europe and Asia.
For fourth-quarter earnings due in late January, analysts are expecting the company to post a 3% decline in sales and a nearly 40% decline in earnings per share, according to FactSet. Analysts expect the downward trend in sales and profits to finally reverse as 2026 rolls around.
Musk said early last year that there was a “huge rebound” in sales, but investors were dismayed when that didn’t pan out, choosing instead to focus on Musk’s pivot to different parts of the business. He has said the company’s future lies in its driverless robot taxi service, its energy storage business and building robots for homes and factories — and much less with car sales.
