In 2025, Tesla went through a difficult year and lost its position as the world’s biggest seller of electric cars. A Chinese company called BYD sold more electric vehicles and stole Tesla’s first position. What’s more, other situations affected Tesla, like political changes, international competition, and the removal of tax credit that made its cars cheaper. So, we are here to tell you everything that happened with the American company, let’s get started.
Tesla loses its position
Tesla is no longer the company that sells more electric vehicles in the world. In 2025, it sold 1.64 million vehicles, which represents a 9% less than the previous year. On the other hand, BYD sold 2.26 million cars. This difference meant that BYD is now the leading company in the worldwide market of electric cars.
The American company also experienced issues with its sales in the last trimester of the year, since, between October and December, Tesla delivered 418,227 vehicles, while experts expected about 440,000. So, Tesla sold less than what analysts had predicted.
Reasons affecting Tesla
The American company faced several difficulties during the year that influenced the fall of its sales. These are the reasons:
- Concern about Elon Musk’s political activities: Elon Musk, Tesla’s CEO, was involved in political situations that made customers and investors uncomfortable. The could have negatively influenced the brand’s image and some people’s decision when buying these cars.
- Stronger international competition: international companies, especially in China, have grown a lot and many companies offer cheaper electric cars or with features that attract buyers, especially in markets outside the United States.
- No more tax credit: before, customers could receive a tax credit of $7,500 for buying an electric car, but this benefit ended in September due to government decisions. This may have discouraged some people from buying a Tesla.
Trying to gain back its position
Even though the sales have lowered, Musk’s company is making important decisions to improve its situation. The company started cheaper versions of two of its most popular cars: the Model Y and the Model 3. These are the new prices:
- Model Y: less than $40,000.
- Model 3: less than $37,000.
These versions are simpler and cheapèr and aim to compete against Chinese electric models that are taking Europe and Asia. What’s more, Tesla wants to boost futuristic projects like: robotaxi services and humanoid robots that can do basic tasks in homes and offices.
Financial results and expectations
Despite selling less cars, Musk’s company’s stock prices increased 11% in 2025. Before markets opened one Friday, the stock even rose nearly 2%, and later stayed around $450.27. For the fourth-quarter financial results (coming out in late January), analysts expect:
- A 3% decrease in sales.
- A nearly 40% drop in earnings per share.
Despite this, many experts think the downward trend might stop and slowly improve later in 2026.
Elon Musk’s great payments
Apart from all of this, we have to talk about decisions related to Musk’s salary:
- In November, shareholders tried a plan that could give Musk $1 trillion if Tesla achieves very ambitious goals in the next 10 years.
- The Delaware Supreme Court also reversed a previous decision and restored a pay package worth $550 billion that Musk was awarded in 2018.
With these two movements, Musk (already the richest man in the world) received two enormous financial wins.
So…
Although the American company has lost its leading position when it comes to selling electric cars and it has experienced negative situations, investors still put their faith in the future of the company. Also, many of them expect things to get better this year 2026.