Tesla loses its place as the world’s leading seller of electric vehicles to the Chinese BYD | Elon Musk News

The decline in sales comes amid outrage over Elon Musk’s political forays and U.S. tax breaks on electric vehicles.

Tesla has lost its place as the world’s leading seller of electric vehicles to Chinese company BYD, capping a year marked by outrage over CEO Elon Musk’s political maneuvering and the end of tax breaks for customers in the United States.

The company revealed Friday that it will sell 1.64 million vehicles in 2025, compared to 2.26 million vehicles for BYD. Sales represent a 9% decline for Tesla from the previous year.

Tesla, founded in 2003, had for years far outpaced traditional automakers in developing and selling electric vehicles. However, the market is becoming increasingly crowded with competitors, with China’s electric vehicle market booming.

Musk’s embrace of US President Donald Trump in 2024 and subsequent leadership of a controversial “Government Effectiveness” (DOGE) panel behind widespread layoffs of federal workers has also proven polarizing. The political incursion sparked protests at Tesla facilities and collapses in sales.

The company’s fourth-quarter sales totaled 418,227 units, short of the much-reduced target of 440,000 units predicted by analysts recently surveyed by FactSet, an investment research firm.

Musk left DOGE in May, in what was widely seen as an effort to reassure investors.

Tesla was also hit hard by the expiration of a $7,500 tax credit for purchasing electric vehicles, which was phased out by the Trump administration in late September. Trump’s opposition to electric vehicles has contributed to a strained relationship with Musk.

Despite the downward sales trend, investors generally remained optimistic about Tesla and Musk’s ambitious plans to make the company a leader in driverless robo-taxi and humanoid robot services for homes.

Reflecting this optimism, Tesla stock ended 2025 up about 11%.

Tesla also recently introduced two cheaper electric vehicle models, the Model Y and Model 3, intended to compete with cheaper Chinese models sold in Europe and Asia.

Musk entered 2026 as the richest person in the world.

It is widely believed that the IPO of his rocket company, SpaceX, planned for later this year, could make the 54-year-old the world’s first billionaire.

In November, Tesla executives awarded Musk a potentially historic salary package of nearly $1,000 billion if ambitious performance targets were met.

Musk scored another huge victory in December, when the Delaware Supreme Court overturned a lower court’s ruling, granting him a $55 billion pay package that had been on hold since 2018.

Conversely, Tesla faces temporarily losing its license to sell cars in California after a judge ruled that it misled customers about the safety of its driverless taxis.