Tesla Loses Its EV Crown
A Shift in the EV Market
Tesla, once the undisputed leader in electric vehicles (EVs), has been overtaken by BYD, a Chinese automaker. In 2025, BYD sold 2.26 million EVs, while Tesla managed 1.64 million. This marks the first time Tesla has not been the top EV seller.
Tesla's Declining Sales
Tesla's sales have been on the decline for two consecutive years. In the last quarter of 2025, Tesla's sales dropped by 16%. This decline coincided with the end of a $7,500 tax credit for EVs in the US. Experts suggest that Elon Musk's political views have also negatively impacted Tesla's sales.
BYD's Global Strategy
Unlike Tesla, BYD did not rely on the US market to achieve its success. Instead, BYD focused on expanding its sales in Europe and Latin America, while continuing to dominate in China.
Tesla's Future: Robotics and AI
Despite the drop in car sales, Tesla remains focused on its future in robotics. Elon Musk has been vocal about the potential of Optimus, a humanoid robot, which he believes could account for 80% of Tesla's value.
Investor Confidence
Investors appear to share Musk's optimism. Despite the decline in car sales, Tesla's stock increased by 11% in 2025. In November, shareholders approved a substantial pay package to retain Musk as CEO.
Industry-Wide Challenges
Tesla is not alone in facing sales challenges. Rivian, another EV company, also reported worse-than-expected sales and is shifting its focus towards AI.
