TL;DR
Tesla delivered 1.63 million vehicles in 2025, a 9% decline from 2024, while China’s BYD led global EV deliveries with 2.26 million. The company’s fall in sales has been linked to the removal of the U.S. federal EV tax credit and rising competition from Chinese automakers.
What happened
Tesla reported global deliveries of 1.63 million vehicles for 2025, down from 1.79 million the year before, marking a second consecutive annual decline. Fourth-quarter deliveries fell sharply to 418,227, a 15.6% drop versus the same quarter a year earlier, and Tesla shares opened more than 2% lower after the New Year holiday. About 50,850 of the 2025 deliveries were categorized as “other models,” a group that includes the Cybertruck alongside older Model X and Model S units. The company’s third-quarter sales had spiked to a record 497,099 as buyers rushed to purchase before the $7,500 U.S. federal tax incentive expired; sales weakened afterward despite price and promotion efforts. Meanwhile, China’s BYD delivered 2.26 million EVs in 2025, overtaking Tesla as the top global seller. Tesla CEO Elon Musk has been steering the company toward AI and robotics as strategic priorities, even though a large portion of Tesla’s revenue remains tied to vehicle sales.
Why it matters
- Shift in global leadership: BYD’s higher deliveries signal a change in the top seller position in the EV market.
- Policy impact on demand: Removal of the $7,500 U.S. federal tax credit appears to have depressed U.S. sales and triggered a prior buying surge.
- Competitive pressure: Chinese automakers are eroding Tesla’s market share in key regions such as Europe and China.
- Strategic risk: Tesla’s executive focus on AI and robotics comes while most revenue still derives from EV sales, highlighting a potential mismatch between strategy and current income drivers.
Key facts
- Tesla delivered 1.63 million vehicles globally in 2025, down 9% from 1.79 million in 2024.
- BYD delivered 2.26 million EVs in 2025 and surpassed Tesla as the world’s top EV seller.
- Tesla’s Q4 2025 deliveries were 418,227, a 15.6% decline year-over-year.
- Approximately 50,850 of Tesla’s 2025 deliveries were classified as “other models,” including the Cybertruck, Model X and Model S.
- Tesla sold a record 497,099 vehicles in Q3 2025 as buyers raced to purchase before the U.S. federal tax credit expired.
- The $7,500 U.S. federal EV tax incentive was removed and is cited as a major factor in the fourth-quarter slowdown.
- Tesla stock fell more than 2% at the market open following the results after the New Year holiday.
- In the third quarter referenced, Tesla reported $28 billion in revenue, with $21.2 billion coming from EV sales.
- Chinese automakers have chipped away at Tesla’s market share in Europe and China; Chinese-made cars remain barred from selling in the United States according to the source.
What to watch next
- Whether Tesla can regain market share in Europe and China amid accelerating Chinese competition — not confirmed in the source.
- How Tesla’s sales mix and pricing strategies respond if U.S. incentives or other policy supports change — not confirmed in the source.
- The extent to which Tesla’s pivot toward AI, robotics and other non-EV businesses affects its core EV revenue and margins — not confirmed in the source.
Quick glossary
- EV (electric vehicle): A vehicle that uses one or more electric motors for propulsion instead of, or in addition to, an internal combustion engine.
- Deliveries: Industry measure counting vehicles handed over to customers during a reporting period; commonly used to indicate sales momentum for automakers.
- Federal EV tax credit: A government tax incentive intended to lower the effective purchase cost of qualifying electric vehicles for consumers.
- Market share: The portion of total sales in a market captured by a company, usually expressed as a percentage of overall industry sales.
- Other models: A reporting category automakers sometimes use to group lower-volume or distinct vehicle lines that are not part of the company’s main model volume counts.
Reader FAQ
Has Tesla lost its status as the top global EV seller?
Yes. BYD delivered 2.26 million EVs in 2025 and surpassed Tesla, which delivered 1.63 million.
What caused Tesla’s sales decline in 2025?
The company links the fall to the removal of the $7,500 U.S. federal tax credit and stronger competition from Chinese automakers.
Did the U.S. federal tax credit affect Tesla sales timing?
Yes. Tesla recorded a Q3 2025 delivery surge as buyers rushed to purchase before the federal credit expired; sales declined afterward.
Are Chinese automakers selling cars in the U.S. now?
Not according to the source; the article states Chinese automakers are barred from selling vehicles in the United States.
Tesla annual sales have fallen for the second year in a row, a drop fueled by the removal of the federal tax credit in the U.S. and competition from Chinese…
Sources
- Tesla annual sales decline 9% as it’s overtaken by BYD as global EV leader
- Tesla loses title as world's biggest electric vehicle maker …
- Tesla sales fall 16% in Q4 amid rivals, EV credit loss
- Tesla Dominated EVs For Years. BYD Just Left It In The Dust
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