Tesla’s Decline in Sales
Tesla has lost its title as the world’s top EV maker, with sales falling 9% in 2025, according to recent reports from FOX LA and CBS News. The company delivered 1.64 million vehicles in 2025, down from 1.79 million in 2024. This decline in sales can be attributed to the expiration of the $7,500 U.S. federal tax credit and increased competition in the global market.
Impact of Tax Credit Expiration
The expiration of the $7,500 tax credit has significantly impacted Tesla’s sales, as buyers are no longer incentivized to purchase electric vehicles. As reported by Morning Brew, the elimination of this tax credit has led to a decline in demand, particularly in the U.S. market. Additionally, KCRA notes that the customer revolt over Elon Musk’s right-wing politics has also contributed to the decline in sales.
Chinese Rival BYD Takes the Lead
Chinese rival BYD has taken the lead as the world’s biggest EV maker, selling 2.26 million vehicles in 2025. This is a significant increase from the previous year, with BYD’s sales jumping 28%, as reported by Morning Brew. The company’s ability to leverage lower production costs and rapid innovation has enabled it to outpace American firms, including Tesla.
Market Implications
The shift in market leadership signals a major turning point in the global automotive industry. As Chinese manufacturers continue to innovate and expand their market share, American firms will need to adapt to remain competitive. The decline in Tesla’s sales also raises questions about the company’s ability to maintain its market share in the face of increasing competition.
According to SFGate, Tesla’s stock price was down nearly 3% at $436.85 in afternoon trading on Friday. This decline in stock price reflects the market’s concerns about the company’s ability to compete in a rapidly changing industry.
