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Key Takeaways
- Tesla posted its second consecutive year of declining sales in 2025, allowing rival BYD to pull ahead in global EV sales.
- Enthusiasm around AI, robotics and the company’s robotaxi service has driven Tesla’s stock recovery, with some analysts calling 2026 a potential turning point.
A disappointing year of electric vehicle sales is finally in the rear-view mirror for Tesla (TSLA).
The company reported 418,227 deliveries in the fourth quarter, down 16% year-over-year and below the 422,850 consensus estimate of 20 analysts it had reported Monday in advance of the release.
Tesla delivered 1,636,129 vehicles in 2025, 9% below the previous year’s figure. It was the company’s second straight yearly decline, which allowed competitors to gain ground.
After narrowly coming up short of Tesla’s EV sales in 2024, Chinese rival BYD announced that it had surpassed the American firm in 2025 with 2,256,714 deliveries, up 28% year-over-year.
Why This Matters
Tesla’s vehicle deliveries declined for a second straight year, allowing rival BYD to pull ahead in global EV sales. Despite delivery disappointments, investors have increasingly focused on the company’s longer-term bets on autonomous driving, robotics and AI.
Despite slumping EV sales, the year saw some bright spots for Tesla: In October, the company posted revenue growth in the third quarter, likely as buyers took advantage of expiring tax credits for EVs. And in mid-December, despite Morgan Stanley downgrading its rating on the company shortly before, Tesla’s stock climbed to an all-time high, setting its first record high in a year.
The stock’s comeback—it more than doubled from its March lows—could be traced to excitement about the company’s plans for robotics, AI and the rollout of its robotaxi service, as well as for CEO Elon Musk’s renewed commitment to the company after spending the earlier part of 2025 heading President Donald Trump’s DOGE cost-cutting effort.
Wedbush analyst Dan Ives predicted in a December note that 2026 will be a “game changer” for the company. “We believe the march to an AI driven valuation for TSLA over the next 6-9 months has now begun,” wrote Ives, who thinks Tesla stock could rise to $800 by the end of this year.
Tesla shares were down 1.2% at around $444 in late-morning trading, after rising nearly 2% early in the session.
