Tesla has lost its position as the world’s largest electric vehicle maker after deliveries fell for a second consecutive year in 2025, weighed down by intensifying competition and weakening demand in key markets, AP reported.The US electric carmaker said it delivered 1.64 million vehicles in 2025, a decline of 9 per cent from the previous year. Chinese rival BYD, which sold 2.26 million electric vehicles last year, has now overtaken Tesla as the world’s biggest EV manufacturer.

Tesla Launches First Showroom in India at Mumbai's BKC | Cheapest EV Model Y Costs...

Fourth-quarter deliveries stood at 418,227 vehicles, below the 440,000 units expected by analysts polled by FactSet. Sales in the quarter were also hit by the expiry of a $7,500 US federal tax credit that was phased out by the Trump administration at the end of September.Tesla shares were largely unchanged in early trade on Friday at $450.27, as investors continued to look beyond near-term sales pressures. The stock ended 2025 up about 11 per cent, reflecting optimism around the company’s longer-term strategy.Despite declining vehicle sales, investors are betting on chief executive Elon Musk’s push to reposition Tesla as a leader in autonomous mobility and robotics. Musk has repeatedly said that future growth will be driven by robotaxi services, energy storage and humanoid robots designed for use in homes and factories.

The fourth quarter marked the first full period of sales for stripped-down, lower-priced versions of the Model Y and Model 3, unveiled in early October to revive demand. The new Model Y is priced just under $40,000, while the cheaper Model 3 starts below $37,000. These models are expected to help Tesla compete more aggressively with Chinese EV makers in Europe and Asia.Looking ahead, analysts expect pressure on financial performance to continue in the near term.

For the fourth-quarter results due in late January, Tesla is forecast to report a 3 per cent drop in revenue and a nearly 40 per cent fall in earnings per share, according to FactSet. Analysts, however, expect sales and profits to stabilise and begin recovering as 2026 progresses.Musk has argued that falling car sales are less critical to Tesla’s long-term outlook, as the company pivots towards new technologies and business lines. Supporting that vision, shareholders approved a potentially large new pay package for Musk at the company’s annual meeting in November.Musk, already the world’s richest individual, also received a boost last month when the Delaware Supreme Court reversed an earlier ruling that had voided a $55 billion pay package awarded to him by Tesla in 2018.