Tesla has published preliminary global sales figures for 2025, revealing a second straight year of declining sales, with an even bigger drop than the 1.1 per cent fall it recorded in its first annual sales decline in 2024.
The electric vehicle (EV) maker has said it expects to announce sales of 1,640,752 vehicles for 2025, down from 1,704,093 vehicles in 2024, with its forecast meaning it will lose its status as the world’s number-one EV maker to China’s BYD.
The 3.7 per cent annual sales decline marks the second straight year of falling sales for the United States (US) EV giant after a tumultuous year, which included an updated Model Y that remains on track to be the world’s biggest-selling EV model.
Figures from China show BYD sold a total of 4.6 million vehicles worldwide in 2025, with 2.2 million of those being EVs, allowing BYD to take the top spot for EV sales after missing out to Tesla in 2024.
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Tesla CEO Elon Musk – who remains the richest person in the world, according to Forbes – has forecast the brand will improve to 1.75 million sales in 2026, and reach an ambitious four million vehicles by 2027.
Tesla sales for the October–December 2025 quarter were down 16 per cent year-on-year to 423,000 vehicles.
The automaker posted a 37 per cent decrease in income for the July–August period after its worst quarterly loss in a decade in April–June 2025.
Tesla pointed to production changeovers for the new Model Y and updated Model 3 as factors in the sales declines earlier in 2025, but a number of factors have been cited as contributing to the brand’s lower volume.
While Tesla faced challenges from automotive tariffs, with manufacturing in China, Germany and the United States, it also suffered significant sales falls in Europe and Australia early in 2025, seen as a backlash against Mr Musk’s role with the US government.
Further controversy included reports of attempts by board members to oust Mr Musk as CEO (later denied), a role he has held since 2008, while in November 2025 a $US1 trillion (A$1.5tn) compensation package for Mr Musk was approved by shareholders despite some opposition.
The company launched its first robotaxi operation mid-year, starting in Austin, Texas, and later expanding to San Francisco, but well short of the promised 500 robotaxis in Austin and 1,000 in San Francisco.
Full Self-Driving (Supervised) was introduced in Australia and New Zealand in September 2025 for certain Model 3 and Model Y variants.
The latest available EV Council figures for Australia to November 30, 2025, have Tesla leading BYD in the EV sales race by more than 5,000 vehicles at 26,271, but on track to finish well short of the 38,347 Teslas sold in Australia in 2024, itself a 16.9 per cent drop compared to 2023.
Despite the challenges, the Model Y is set to be the top-selling EV in Australia, with its 20,241 result to November 30 almost double that of the next-best BYD Sealion 7 (10,864).