Elon Musk promised a ‘major rebound’ for Tesla in 2025. Instead it fell behind its biggest rival from China

Core Insights - Tesla has lost its position as the world's bestselling electric vehicle maker, with deliveries falling to 1.64 million vehicles in 2025, a 9% decrease from the previous year, while Chinese rival BYD sold 2.26 million vehicles [1] - The decline in sales is attributed to factors such as customer backlash against Elon Musk's political stance, the expiration of U.S. tax breaks for electric vehicle buyers, and increased competition from overseas [1][2] - Tesla's fourth-quarter sales were 418,227, missing the reduced target of 440,000 set by analysts, largely due to the end of a $7,500 tax credit for electric vehicle purchases [3] Sales and Financial Performance - The latest quarter marked the introduction of lower-cost versions of the Model Y and Model 3, priced under $40,000 and $37,000 respectively, aimed at boosting sales and competing with Chinese models in Europe and Asia [5] - Analysts predict a 3% drop in sales and nearly a 40% decline in earnings per share for the upcoming fourth-quarter earnings report [6] - Despite the sales drop, Tesla's stock gained approximately 11% in 2025, reflecting investor optimism in Musk's vision for the company's future beyond car sales [4] Future Outlook - Musk has shifted focus towards developing driverless robotaxis, energy storage solutions, and home and factory robots, indicating a strategic pivot away from traditional car sales [7]