Tesla Disappoints with Largest Sales Decline in Their History
Tesla sales are way down compared to last year as the company suffers its largest year-over-year sales drop.
Quick overview
- Tesla reported a significant decline in EV sales for 2025, with only 1.63 million units sold, marking an 8.5% drop and their largest decrease ever.
- In the 4th quarter, Tesla delivered 418,227 vehicles, failing to meet Wall Street expectations, leading to a nearly 5% drop in stock value.
- The company faces challenges from increased competition, political opposition to CEO Elon Musk, and a shift in consumer preference towards hybrids and combustion engine vehicles.
- Despite plans for a budget-friendly Model Y, Tesla's stock remains elevated but does not align with earlier analyst expectations.
Tesla (TSLA) just released their 4th quarterly sales figures, and they reported only 1.63 million EV sales for the year, which is a decrease of 8.5% and their biggest drop ever.
For the 4th quarter, Tesla only delivered 418,227 electric vehicles and did not meet the expectations of Wall Street or their investors. In 2025, they suffered the greatest year-over-year decline in sales, and their stock dropped nearly 5% on Tuesday as a result.
Tesla CEO Elon Musk came back to the company earlier this year and has attempted to right the ship, but he faced strong opposition from the public for his connections to President Donald Trump. Tesla has also been in the news repeatedly over poor sales figures this year, with declining numbers in European and western markets.
At the beginning of the year, Tesla was performing poorly in relation to climbing sales numbers from the competition, but near the end of the year, both Tesla and the wider electric vehicle market fell considerably. Even a sharp uptick in sales close to when the U.S. government EV credits were set to expire did not move the dial enough to mark 2025 as a good year for electric vehicles.
Tesla Has a Tough Road to Recovery
Back in 2023, Tesla beat its competitors soundly with 1.79 million EV sales. Those numbers have dropped drastically since then, and that is partly because of political opposition against its CEO Musk. But EVs are also losing their status and popularity, with consumers moving to hybrids or combustion engine vehicles in large numbers.
Cost of living increases have also hurt the EV market. Many consumers are buying combustion engine vehicles to combat rising inflation and higher cost of living in numerous markets, including the United States, China, and much of Europe. Tesla simply has less appeal as prices continue to skyrocket.
The company is working on a low cost version that is still set to be released. That budget-friendly Tesla vehicle was set to release back in weary 2025. Named the Model Y, this car was delayed until late 2025 and has now been pushed back until later this year. At this point, Tesla cannot afford to have a shaky product launch, partially with someone as important as a new, economic model during a time when it could really take off.
Tesla stock has been in decline since before Christmas but is still elevated compared to the last six months. In null of 2025, the stock traded at around $332 and then climbed to $429 in October. Now at $432 per share, the stock is elevated but not in line with analyst expectations for the company that were made early last year when Tesla was doing remarkably well.
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