What's happened
Tesla delivered 1.64 million vehicles in 2025, down 9%, with Q4 sales falling short of expectations. Chinese rival BYD surpassed Tesla as the largest EV maker. Despite setbacks, Tesla's stock rose 11% last year, driven by new models and future growth prospects.
What's behind the headline?
Tesla's 2025 performance highlights the challenges of maintaining growth in a rapidly evolving EV market. The decline in sales reflects intensified competition from BYD and European automakers, as well as the impact of policy changes like the tax credit phase-out. Musk's strategic shift to lower-cost models aims to regain market share, especially in Europe and Asia, where BYD's registrations surged 240%. Despite short-term setbacks, Tesla's stock gained 11%, indicating investor confidence in Musk's long-term vision. The company's focus on AI, humanoid robots, and energy storage suggests a pivot toward future technologies, but these areas have yet to translate into immediate sales growth. The upcoming earnings report will clarify whether Tesla can reverse its sales decline and capitalize on new product launches.
What the papers say
Sky News reports Tesla's 2025 vehicle deliveries fell 9%, with Q4 sales short of analyst expectations, impacted by the end of a US tax credit. NY Post highlights the 16% quarterly decline and BYD's 28% sales increase, emphasizing the fierce competition from Chinese EVs. The Independent notes Tesla's overall 8.6% drop in deliveries but points out the stock's 11% rise, driven by investor optimism about future innovations. AP News echoes these points, stressing the strategic shifts and Musk's ambitious pay package, which is tied to performance targets. Contrasting opinions focus on the immediate sales slump versus long-term growth prospects driven by technological advancements and market expansion.
How we got here
Tesla's 2025 sales decline follows increased competition from Chinese automaker BYD, which sold 2.26 million vehicles last year. The company faced headwinds from the end of a US tax credit, market competition, and geopolitical issues affecting brand perception. CEO Elon Musk's ambitious pay package and focus on AI and robotics also influence investor sentiment.
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Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. The company specializes in electric vehicle manufacturing, battery energy storage from home to grid scale and, through its acquisition of SolarCity, solar
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Elon Reeve Musk FRS is an engineer, industrial designer, technology entrepreneur and philanthropist. He is the founder, CEO, CTO and chief designer of SpaceX; early investor, CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-foun
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BYD Auto Co., Ltd. (Chinese: 比亚迪汽车; pinyin: Bǐyàdí Qìchē) is the automotive subsidiary of BYD Company, a publicly listed Chinese multinational manufacturing company. It manufactures passenger battery electric vehicles (BEVs) and plug-in hyb
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BYD Company Limited or BYD is a publicly listed Chinese multinational manufacturing conglomerate headquartered in Shenzhen, Guangdong, China.