Tesla Loses Global EV Sales Lead as Political Backlash and Rising Competition Weigh on Deliveries

BY EMMANUEL OGBONNA

Tesla has surrendered its long-held position as the world’s top-selling electric vehicle maker after a second straight year of declining sales, pressured by intensifying global competition and a backlash from some customers over the political views of its chief executive, Elon Musk.

The company reported on Friday that it delivered 1.64 million vehicles worldwide in 2025, a 9% drop from the previous year. The decline allowed China’s BYD to overtake Tesla as the largest electric vehicle seller globally after BYD recorded sales of 2.26 million vehicles over the same period.

The slowdown was particularly evident in the final months of the year. Tesla said fourth-quarter deliveries totaled 418,227 vehicles, falling short of the roughly 440,000 units expected by analysts. The quarter was also affected by the expiration of a $7,500 federal electric vehicle tax credit in the United States, which was phased out at the end of September, reducing incentives for some buyers during a key selling period.

Despite the disappointing figures, Tesla shares showed little immediate reaction, trading mostly flat at $450.27 in early Friday trading. The muted response reflected investor confidence that the company’s long-term strategy extends well beyond near-term vehicle sales.

For much of 2025, Tesla has faced mounting challenges. In addition to growing competition from Chinese manufacturers offering cheaper models, particularly in Europe and Asia, the automaker has also contended with public criticism tied to Musk’s increasingly vocal right-wing political positions. Some analysts believe that controversy has alienated a portion of Tesla’s traditional customer base, especially in liberal-leaning urban markets that were once core to the brand’s success.

In response to the sales slide, Tesla introduced lower-priced versions of its two most popular models late in the year. The fourth quarter marked the first full sales period for stripped-down variants of the Model Y and Model 3, which Musk unveiled in early October. The revised Model Y carries a price tag just under $40,000, while the more affordable Model 3 starts below $37,000. The company hopes these models will help narrow the price gap with Chinese rivals and reignite demand in key overseas markets.

Looking ahead, Wall Street expects continued pressure on Tesla’s financial results in the near term. Analysts forecast that fourth-quarter revenue will fall about 3% compared with a year earlier, while earnings per share are projected to drop by nearly 40%. Expectations are that sales and profitability could begin to recover later in 2026 as new products and services gain traction.

So far, many investors appear willing to tolerate weakening car sales as they focus on Musk’s broader vision for the company. He has repeatedly argued that Tesla’s future value lies less in traditional vehicle manufacturing and more in emerging businesses, including a planned driverless robotaxi network, energy storage systems, and the development of humanoid robots designed to perform basic tasks in homes, offices, and factories.

That optimism helped Tesla’s stock finish 2025 up about 11%, even as deliveries fell. It has also translated into continued support for Musk personally. In November, shareholders approved a new, potentially massive compensation package for the CEO, reinforcing confidence in his leadership despite growing controversy.

Musk, already the world’s wealthiest individual, also received a significant boost earlier this month when the Delaware Supreme Court overturned a prior ruling that had stripped him of a $55 billion compensation package originally granted by Tesla in 2018. The decision restored one of the largest executive pay awards in corporate history, underscoring the high stakes surrounding Tesla’s next phase.

As Tesla enters 2026, the company faces a pivotal moment. With its dominance in electric vehicles no longer assured, its success may increasingly hinge on whether Musk can turn ambitious promises about autonomy, robotics, and energy into profitable, scalable businesses.