After a year marked by controversy over CEO Elon Musk’s political maneuvering and the termination of US tax advantages for consumers, Tesla lost its position as the world’s leading seller of electric cars to Chinese manufacturer BYD.
Tesla loses EV market leadership
In contrast to BYD, which sold 2.26 million cars in 2025, the business said on Friday that it had sold 1.64 million cars. Tesla’s sales decreased by 9% from the previous year.
Since its founding in 2003, Tesla has developed and sold electric automobiles significantly more quickly than conventional manufacturers. However, there are more and more rivals in the industry, with China’s electric car sector leading the way.
BYD electric vehicle sales 2025 vs Tesla
Musk’s 2024 embrace of US President Donald Trump and his subsequent leadership of the contentious “government efficiency” panel (DOGE), which was responsible for the mass layoffs of governmental employees, have also been divisive. Sales declines and demonstrations at Tesla sites were the results of the political venture.
The company’s fourth-quarter sales of 418,227 fell short of the much lower 440,000 objective that financial research firm FactSet recently asked analysts to predict. In an apparent attempt to reassure investors, Musk departed DOGE in May.
Elon Musk Tesla controversy and political fallout
🚗 Global EV Sales Comparison 2025
- Market Leaders: BYD and Tesla
- BYD Sales: 2.26 million electric vehicles
- Tesla Sales: 1.64 million electric vehicles
- Sales Trend: Tesla sales decline 2025 by 9%
- Key Region: China EV market vs Tesla globally
The Trump administration’s phase-out of a $7,500 tax credit for the purchase of electric vehicles at the end of September also had a severe impact on Tesla. Musk and Trump have a tense relationship as a result of Trump’s resistance to electric cars.
Investors have largely remained bullish about Tesla and Musk’s lofty goals to establish the business as a leader in autonomous robotaxi services and humanoid robots for homes, despite the declining trends in sales. Tesla’s shares ended 2025 up almost 11%, reflecting that confidence.
Tesla sales decline 2025 and investor confidence
🤖 Tesla’s Future Bets and Legal Challenges
- Core Vision: Autonomous robotaxi services
- Innovation: Humanoid robots for homes
- New Models: Affordable Model Y and Model 3
- Risk Factor: Regulatory scrutiny in California
- Market Pressure: Rising competition from China EV market
Additionally, Tesla recently unveiled the Model Y and Model 3, two more affordable electric car models designed to rival less costly Chinese versions sold in Europe and Asia. Musk was the world’s richest person in the beginning of 2026.
The 54-year-old may become the first trillionaire in history when his rocket business, SpaceX, goes public later this year. Musk received a potentially unprecedented compensation plan of about $1 trillion from Tesla’s board in November, contingent on meeting aggressive performance goals.
Elon Musk wealth, SpaceX, and Tesla compensation
In December, the Delaware Supreme Court overturned a lower court’s decision, giving Musk a $55 billion compensation package that had been on hold since 2018. This was another significant victory for Musk.
On the other hand, a Californian court found that Tesla had deceived consumers about the safety of its autonomous taxis, putting the company in danger of temporarily losing its license to sell vehicles in that state.
