Tesla loses top spot as electric car sales continue to slide

Tesla used to be the undisputed king of the electric car world. For nearly ten years, the company grew faster than almost any other car maker in history. It seemed like nothing could stop them. Unfortunately, the latest numbers for 2025 show that the crown has finally slipped. For the second year in a row, the company saw a drop in the number of vehicles it handed over to customers.

The decline is not just happening - it is moving faster than ever. In 2023, Tesla reached its highest point, delivering 1.81 million electric cars. By 2024, that number fell slightly to 1.79 million. Now that the 2025 data is out, the picture looks even tougher for the American brand. Tesla reported that it delivered a total of 1,636,129 vehicles for the full year of 2025. That's a drop of just over 8.5% compared to the previous year.

The fourth quarter of 2025 was particularly difficult. Between October and December, Tesla delivered 418,227 vehicles globally. While that is a lot of cars, it is 15.61% lower than the same period in 2024. It is also nearly 16% lower than the three months that came right before it. Most experts who follow the stock market expected Tesla to deliver at least 420,399 units. Tesla even tried to manage expectations by releasing its own list of analyst guesses, which averaged out to 422,850. In the end, the company could not even hit those lowered targets.

When we look at the specific models, the Model 3 and Model Y still do most of the heavy lifting. In the final quarter of the year, Tesla produced 422,652 of these two models and delivered 406,585 of them. For the full year, the company built 1,600,767 units of the Model 3 and Model Y, and delivered 1,585,279 of them. The "Other Models," which include the more expensive Model S, Model X, and the Cybertruck, saw much smaller numbers. Tesla produced 53,900 of these "Other Models" during the year and delivered 50,850.

The biggest shock in the report is that Tesla is no longer the world leader in battery electric vehicles (BEVs). That title now belongs to BYD, which sold a massive 2,256,714 pure electric cars in 2025. That is over 600,000 more cars than Tesla sold. While Tesla's sales were shrinking, BYD's sales grew by almost 28%. BYD also sells many plug-in hybrids, though those sales actually dropped a bit to 2,288,709 units. Still, in the race for pure EVs, the Chinese rival has taken the lead.

There are a few reasons why Tesla is struggling. In Europe, many people are turning away from the brand. New registrations for Tesla cars in Europe dropped by 28% in the first 11 months of 2025. Some experts think this is because of the political activities of CEO Elon Musk, which have made the brand less popular in certain countries.

Meanwhile, BYD saw its European sales grow by a staggering 276% in that same time. In China, the competition is also getting much fiercer. Tesla's sales there fell by over 7% through November as local brands offered newer and cheaper electric cars.

Tesla's current lineup of cars is also getting a bit old. The Model 3 and Model Y have been around for a while, and the recent refresh didn't really move the interest needle. In a fast-moving market, buyers often want the newest technology and fresh designs. Without new models to get people excited, Tesla has had to rely on price cuts and incentives, but even those are starting to disappear in places like the United States.

There was one small bit of good news in the latest financial report. Tesla set a new record for its energy storage business. The company deployed 14.2 GWh of energy storage in the final quarter. While this is good news, it is likely not enough to make up for the lower profits from the car division. Tesla will finish 2025 with less revenue and lower earnings than the year before.

Elon Musk has recently told investors that Tesla is now an AI company rather than just a car company. He wants to focus on robots and self-driving technology. The falling car sales might not worry you if you believe in that vision. But for the rest of us, these latest numbers are a clear sign of trouble.

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