Tesla vehicle sales declined for a second consecutive year in 2025, hitting their lowest point since 2022.
- The results mean that Chinese automaker BYD sold more EVs in 2025 than Tesla for the first time in a full year: 2.26 million for BYD vs. 1.64 million for Tesla.
Why it matters: Tesla vehicle sales are critical to funding CEO Elon Musk's AI ambitions, including humanoid robots and self-driving cars.
Driving the news: The company on Friday reported a 8.6% drop in deliveries — a close approximation to sales — to 1.64 million for the year.
- The full-year drop came despite an unexpected boost to sales in the third quarter as consumers rushed to buy EVs to qualify for the federal EV tax credit before it expired at the end of September.
- Deliveries are now down 9.5% since their all-time high in 2023.
- Deliveries totaled 418,227 for the fourth quarter, down 15.6% from the same period a year earlier and missing Wall Street's consensus estimate of 422,900.
- It was also the automaker's worst fourth-quarter showing since 2022.
The big picture: The company suffered a backlash to Elon Musk's political activity in early 2025 and the end of the federal EV tax credit later in the year.
- Some prospective customers spurned Tesla after Musk became a close adviser to President Trump and leader of the budget-slashing DOGE team.
- Musk acknowledged "some blowback" from his political involvement was hurting the company and eventually left the administration.
Another non-political factor that might be hurting sales: Tesla's vehicles are aging.
- The body styles of the company's primary vehicles have remained mostly unchanged since they debuted — and the only new model Tesla has rolled out recently is the niche-market Cybertruck.
Yes, but: The sales performance was "much better than the whisper numbers" of about 410,000 for the fourth quarter, Wedbush Securities analyst and tech bull Dan Ives wrote.
- The whisper number is an unofficial estimate that sometimes reflects true analyst expectations.
- Tesla shares were up 0.7% in early trading Friday.
What to watch: Whether Tesla's autonomous vehicle strategy takes off in 2026.
- The company recently launched a self-driving car service in Austin, Texas, and is hoping to expand it significantly this year.
Editor's note: This story has been updated with additional details.
