Tesla reports a 16% drop in deliveries – and loses a prestigious title

Tesla sales fell 9% for the full year 2025 and fell 16% in the fourth quarter compared to a year earlier.

The electric car maker is adjusting to a new shopping landscape disrupted by the end of federal subsidies. The company saw a surprise increase in sales in the third quarter as US shoppers rushed to take advantage of the ending $7,500 tax refund. In the fourth quarter there was no special incentive.

Chinese automaker BYD, which does not sell vehicles in the U.S., announced last Thursday that it sold 2.26 million electric vehicles last year, up 28% from 1.76 million the previous year. Tesla reported selling 1.64 million vehicles in 2025, up from 1.79 million the previous year.

Tesla’s final quarterly count was 418,227 vehicles delivered. Tesla missed analysts’ estimates of 422,850 deliveries.

In addition, the company also reported 49% growth in its energy business.

Tesla shares rose 0.5% at the market open.

On the way to a change of direction?

The drop in sales comes as Tesla works to transform its business toward robotics and autonomous vehicles with its Optimus humanoid robot and the wheelless Cybercab. Both products are still in development, and car sales make up about three-quarters of Tesla’s revenue.

In October, Tesla released cheaper, stripped-down versions of its popular Model 3 sedan and Model Y SUV to try to spur demand. However, US sales fell in the first two months of the quarter, according to industry data.

In November, shareholders approved a new pay package for Musk that could make him the world’s first trillionaire if he manages to increase Tesla’s market value to $8.5 trillion, while achieving a series of financial and operational goals, including selling more vehicles and launching its robotics business.

Tesla Chairman Robin Denholm said the record-breaking package was necessary to keep Musk focused and involved in the next phase of the company’s growth.

Musk said he expects to have hundreds of thousands of fully autonomous Teslas on U.S. roads by the end of the year, many of them privately owned vehicles. The company plans to begin production of its dedicated autonomous vehicle, the Cybercab, this year.

Tesla struggled in Europe last year. The automaker registered 25,477 cars in 2025 in France, down 37 percent from a year earlier, according to the National Automobile Association. Tesla’s registrations across Europe fell 39% in the first 11 months of 2025, according to the European Automobile Manufacturers Association.