Tesla relinquished its position as the top electric vehicle (EV) manufacturer globally on Friday due to a decline in sales for the second consecutive year, attributed to customer dissatisfaction with Elon Musk’s political affiliations and increased competition from international rivals. The company reported a decrease in vehicle deliveries, with 1.64 million units in 2025, marking a nine percent drop from the previous year.
Chinese automaker BYD surpassed Tesla as the largest EV producer, selling 2.26 million vehicles in the same period. Tesla’s sales for the fourth quarter totaled 418,227 units, falling short of the 440,000 projected by analysts surveyed by FactSet. This shortfall could be linked to the conclusion of a $7,500 US tax credit in September, phased out by the previous administration.
Despite facing various challenges, Tesla’s stock closed the year with an approximately 11 percent increase, buoyed by investor optimism surrounding CEO Elon Musk’s plans to position Tesla as a key player in the robotaxi industry and introduce humanoid robots for household and office tasks. Prior to market opening on Friday, Tesla’s shares saw a nearly two percent uptick.
Overall, the shift in market leadership underscores the evolving landscape of the EV sector and the competitive forces shaping the industry’s future.