NEW YORK (AP) — Tesla lost its crown as the world’s best-selling electric carmaker on Friday as a customer revolt against Elon Musk’s right-wing politics, the expiration of tax breaks for U.S. buyers and fierce overseas competition led to a second straight sales decline.
Tesla said it will deliver 1.64 million vehicles in 2025, a year-on-year decrease of 9%.
Chinese rival BYD sold 2.26 million vehicles last year and is now the largest electric car maker.
It’s a stunning reversal for Musk, who once viewed BYD as a threat as Tesla’s rise seemed unstoppable, crushing traditional automakers with more resources and helping him become the world’s richest man.
Fourth-quarter sales totaled 418,227 vehicles, below the 440,000 expected by analysts polled by FactSet. Total sales were affected by the expiration of the $7,500 tax credit that the Trump administration phased out at the end of September.
Tesla shares rose 0.5% to $451.60 in early trading on Friday.
Despite the multiple problems facing the company, investors are betting that Tesla CEO Elon Musk can realize his ambition to make Tesla the leader in robotaxi services and get consumers to accept humanoid robots that can perform basic tasks in homes and offices. The stock’s gain of about 11% through 2025 reflects this optimism.
The latest quarter was the first time that the Model Y and Model 3 Lite models launched by Musk in early October achieved sales as part of a drive to revive sales. The new Model Y sells for just under $40,000, while customers can buy the cheaper Model 3 for less than $37,000. These versions are expected to help Tesla compete with Chinese models in Europe and Asia.
FactSet data shows that for the fourth-quarter financial report released at the end of January, analysts expect the company’s sales to fall by 3% and earnings per share to fall by nearly 40%. Analysts expect the decline in sales and profits to finally reverse as 2026 approaches.
Investors have largely ignored the declining numbers, choosing instead to focus on Musk’s transition into different business areas.
He has been saying that plummeting car sales are less important now because the company’s future depends more on his new driverless robotaxi service, the company’s energy storage business and building robots for homes and factories. To make his assignment worthwhile, Tesla directors gave Musk a potentially substantial new compensation package, which shareholders backed at the annual meeting in November.
Two weeks ago, the Delaware Supreme Court overturned a decision to strip Musk of the $55 billion in compensation paid by Tesla in 2018, giving Musk another huge windfall.
