Tesla Faces Second Consecutive Year of Declining Sales
Tesla, the electric vehicle (EV) giant, has reported a second consecutive year of declining sales, with figures showing a 9% drop in global deliveries in 2025 compared to the previous year. This decline has been attributed to the removal of the federal tax credit in the U.S. and increased competition from Chinese automakers.
In 2025, Tesla delivered 1.63 million vehicles worldwide, with a notable portion categorized as “other models” including the Cybertruck, Model X, and Model S. The company’s fourth-quarter sales of 418,227 vehicles marked a 15.6% decrease from the same period in the previous year, causing Tesla’s stock to drop by more than 2%.
Despite once being the global leader in EV sales, Tesla has faced stiff competition from Chinese automakers in markets like Europe and China. Chinese company BYD surpassed Tesla in global EV sales in 2025, delivering 2.26 million EVs. Additionally, the elimination of the $7,500 U.S. federal tax incentive has impacted Tesla’s sales, with a record-breaking third quarter followed by a decline in the fourth quarter.
CEO Elon Musk has been working to shift Tesla’s focus from EV production to AI and robotics, as outlined in the company’s recent Master Plan IV. However, 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.
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