Tesla’s outlook darkens as BYD lifts global sales
Tesla ended last year on a roll, with investors increasingly buying into Elon Musk’s ebullience about autonomous vehicles. Winning over actual car buyers is another story.
By Kara Carlson, Linda Lew, Danny Lee and Bei Hu
January 2, 2026 — 3.00pm
Tesla ended last year on a roll, as investors increasingly bought into Elon Musk’s ebullience about autonomous vehicles. Winning over actual car buyers was another story.
Shares in the world’s most valuable car company soared in the second half, largely on the basis of its chief executive officer touting advances in artificial intelligence and robotics. But the progress Musk trumpeted did not translate to success in showrooms – the company most likely sold fewer vehicles in the last six months than a year earlier, despite record deliveries in the third quarter.
Shares in the world’s most valuable car company soared in the second half, largely on the basis of its chief executive officer touting advances in artificial intelligence and robotics.Credit: Bloomberg
On Friday, Tesla is expected to report that it delivered about 440,900 vehicles in the fourth quarter, down 11 per cent from a year earlier, according to data compiled by Bloomberg. Tesla took the unusual step this week of publishing its own average of analyst estimates that was even more pessimistic, calling for a 15 per cent decline.
Wall Street has grown similarly gloomy about the outlook for 2026. This time two years ago, analysts were predicting Tesla would deliver more than 3 million vehicles. That average estimate for deliveries this year has plunged to roughly 1.8 million.
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“Tesla investors are focused on how the company might look five, 10, 15 years down the road, and really discounting what they see in the near term,” Garrett Nelson, an equity analyst at CFRA Research, said. “The question is, can they maintain that, especially when we think headwinds are going to become more apparent in the financials?”
Chinese rival
Conversely, China’s largest car maker, BYD, met its full-year sales target and most likely surpassed Tesla to become the world’s largest electric-vehicle maker in 2025, a milestone overshadowed by a challenging outlook for the Chinese car market in the year ahead.
The car maker delivered 4.6 million vehicles last year, up 7.7 per cent from 2024, according to a statement. That’s in line with the full-year goal the company lowered in September.
