Daijiworld Media Network - New York
New York, Jan 2: Tesla has lost its position as the world’s largest electric vehicle manufacturer after its deliveries declined for a second consecutive year in 2025, amid intensifying competition and weakening demand in key global markets, according to an AP report.
The US electric carmaker said it delivered 1.64 million vehicles in 2025, marking a 9 per cent drop from the previous year. Chinese rival BYD, which sold 2.26 million electric vehicles during the same period, has now emerged as the world’s biggest EV maker.
In the fourth quarter, Tesla delivered 418,227 vehicles, falling short of the 440,000 units projected by analysts surveyed by FactSet. Quarterly sales were also impacted by the expiry of a $7,500 federal tax credit in the US, which was phased out by the Trump administration at the end of September.
Tesla shares were largely flat in early trading on Friday at $450.27, as investors appeared to look beyond short-term sales pressures. The stock ended 2025 with gains of around 11 per cent, reflecting continued optimism about the company’s long-term strategy.
Despite declining vehicle sales, investors are backing chief executive Elon Musk’s vision to reposition Tesla as a leader in autonomous mobility and robotics. Musk has consistently stated that future growth will be driven by robotaxi services, energy storage solutions and humanoid robots intended for use in homes and factories.
The fourth quarter also marked the first full sales period for Tesla’s lower-priced versions of the Model Y and Model 3, unveiled in early October to revive demand. The new Model Y is priced just under $40,000, while the entry-level Model 3 starts below $37,000. These models are expected to strengthen Tesla’s competitiveness against Chinese EV manufacturers in Europe and Asia.
Looking ahead, analysts anticipate continued pressure on Tesla’s financial performance in the near term. For the fourth-quarter results expected later this month, the company is forecast to report a 3 per cent decline in revenue and a nearly 40 per cent fall in earnings per share, according to FactSet. However, analysts expect sales and profits to stabilise and gradually recover through 2026.
Musk has maintained that slowing car sales are less critical to Tesla’s long-term outlook as the company pivots towards new technologies and business segments. Reinforcing this strategy, shareholders approved a potentially large new pay package for Musk at the company’s annual meeting in November.
Last month, Musk also received a major boost when the Delaware Supreme Court overturned an earlier ruling that had voided a $55 billion pay package granted to him by Tesla in 2018.