Tesla annual sales decline 9% as it’s overtaken by BYD as global EV leader

Core Insights - Tesla's annual sales have declined for the second consecutive year, primarily due to the removal of the federal tax credit in the U.S. and increased competition from Chinese automakers [1][4] - In 2025, Tesla delivered 1.63 million vehicles globally, marking a 9% decrease from 1.79 million in 2024 [1] - The fourth-quarter sales were reported at 418,227, reflecting a 15.6% drop compared to the same period last year, which was significantly below analysts' expectations [2] Sales Performance - Tesla's sales in the third quarter reached a record 497,099 vehicles, a 29% increase from the previous quarter, as consumers rushed to purchase EVs before the federal tax credit was eliminated [4] - The decline in sales post-tax credit removal indicates a significant impact on consumer purchasing behavior [4] Market Competition - Tesla's market share has been eroded in Europe and China due to the rise of competitors like BYD, which delivered 2.26 million EVs in 2025, surpassing Tesla in global EV sales [3] - Although Tesla faces competition in the U.S., it is not from Chinese automakers, as they are currently barred from selling vehicles in the country [3] Strategic Shift - CEO Elon Musk is attempting to pivot Tesla's focus from solely manufacturing and selling EVs to broader ventures in AI and robotics, promoting a vision of "sustainable abundance" [5] - Despite this strategic shift, the majority of Tesla's revenue still comes from its EV business, with $21.2 billion out of $28 billion generated in the third quarter attributed to EV sales [6]