Tesla loses title as world’s biggest electric vehicle maker as sales fall again

Tesla lost its crown as the world’s bestselling electric vehicle (EV) maker on Friday as a customer revolt over Elon Musk’s right-wing politics and stiff overseas competition pushed sales down for a second year in a row.

Tesla said it delivered 1.64 million vehicles in 2025, down 9% from a year earlier.

Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.

For the fourth quarter, sales totalled 418,227, falling short of the 440,000 that analysts polled by FactSet expected. The sales total may likely have been impacted by the expiration of a 7,500-dollar (£5,568) tax credit that was phased out by the Trump administration at the end of September.

Even with multiple issues buffeting the company, the stock finished 2025 with a gain of approximately 11%, as investors hope Tesla chief executive Mr Musk can deliver on his ambitions to make Tesla a leader in robotaxi service and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices.

Tesla stock was up 0.5% at 451.60 dollars in early trading on Friday.

The latest quarter was the first with sales of stripped-down versions of the Model Y and Model 3 that Mr Musk unveiled in early October as part of an effort to revive sales.

The new Model Y costs just under 40,000 dollars (£29,700) while customers can buy the cheaper Model 3 for under 37,000 dollars (£27,472). Those versions are expected to help Tesla compete with Chinese models in Europe and Asia.

For fourth-quarter earnings coming out in late January, analysts are expecting the company to post a 3% drop in sales and a nearly 40% drop in earnings per share, according to FactSet. Analysts expect the downward trend in sales and profits to eventually reverse itself as 2026 rolls along.

Investors have largely shrugged off the falling numbers, choosing to focus on Mr Musk’s pivot to different parts of the business.

He has been saying that plunging car sales do not matter as much now because the future of the company lies more with his new driverless robotaxis service, the company’s energy storage business and building robots for the home and factory.

To make his task worthwhile, Tesla’s directors awarded Mr Musk a potentially enormous new pay package that shareholders backed at the annual meeting in November.

Mr Musk, already the world’s richest man, scored another huge windfall two weeks ago when the Delaware Supreme Court reversed a decision that deprived him of a 55 billion-dollar pay package that Tesla doled out in 2018.

Mr Musk could become the world’s first trillionaire later this year when he sells shares of his rocket company SpaceX to the public for the first time in what analysts expect would be a blockbuster initial public offering.