Tesla said it delivered 1.64 million vehicles in 2025, down 9% from the prior year, and the company lost its title as the world’s best-selling electric-vehicle maker to China’s BYD, according to an Associated Press report. The AP story said Tesla’s deliveries fell for a second straight year amid what it described as a customer revolt over Elon Musk’s right-wing politics, the expiration of U.S. tax breaks for EV buyers, and stronger competition abroad.
The change at the top of the global EV market came as BYD sold 2.26 million vehicles last year, surpassing Tesla, the report said. For investors, the results landed amid a push by Tesla leadership toward autonomy and next-generation offerings, including a robotaxi service and “humanoid robots” for homes and offices, even as the core auto business showed persistent weakness.
The fourth quarter added to the pressure. Tesla’s sales for the period totaled 418,227 vehicles, the AP report said, falling short of an even-reduced target of 440,000 that analysts had expected to miss. The story also said Tesla stock fell 2.6% to $438.07 on Friday.
One factor cited in the AP report was policy timing in the United States. It said a $7,500 tax credit for electric-vehicle purchases was phased out by the Trump administration and expired at the end of September, and that the loss of that support weighed on sales. The report also referenced what it described as stiff overseas competition contributing to the decline.
The report tied the sales reversal to multiple moving parts around Tesla’s leadership and product strategy. It said the company introduced stripped-down versions of the Model Y and Model 3 in early October—new Model Y priced just under $40,000 and a cheaper Model 3 available for under $37,000—aimed at improving competitiveness in Europe and Asia. The AP story said the quarter was the first that included those stripped-down models.
Even with the delivery drop, the AP report said investors continued to bet on Musk’s efforts to pivot toward autonomy services and energy and robotics. It said Tesla started rolling out its robotaxi service in Austin in June, first with safety monitors in the cars to take over if needed, then testing without them, and the company hopes to expand the service to several cities this year.
Regulatory scrutiny was also highlighted. The AP report said Tesla is under several federal safety investigations and other probes, and in California a judge had ruled the company misled customers about their safety, putting Tesla at risk of temporarily losing its license to sell cars in the state. Dan Ives, a Wedbush Securities analyst who has been a bull on the stock, told the publication, “Regulatory is going to be a big issue,” adding, “We’re dealing with people’s lives.”
Looking ahead, the AP report said Musk has described the pathway to broader autonomy as software updates enabling hundreds of thousands of Tesla vehicles to operate autonomously with zero human intervention by the end of the year, and it said the company plans to begin production of its AI-powered Cybercab with no steering wheel or pedals in 2026. The report also said Tesla’s directors awarded Musk a potentially large pay package that shareholders backed at the annual meeting in November.
The AP report placed Musk’s expanded compensation in the context of additional recent legal and business developments. It said the Delaware Supreme Court reversed a decision that had deprived Musk of a $55 billion pay package Tesla approved in 2018. It also said analysts expect Musk could become the world’s first trillionaire later this year if SpaceX shares are sold to the public for the first time in an initial public offering.
This story has been corrected to show that BYD sold 2.26 million vehicles last year, not 2.26.