Tesla, Elon Musk’s company, has suffered the biggest annual sales decline in its history, losing its position as the world’s biggest seller of electric cars, reports The Telegraph. Competition from China’s BYD, the elimination of subsidies by the Biden Administration for electric vehicle purchases, as well as Elon Musk’s involvement in politics contributed to extremely poor sales, well below targets set by shareholders.
Tesla sold 418,227 cars in the final three months of 2025, according to new data released on Friday, which represents a 15.6 percent decline from the same period a year earlier.
Tesla, overtaken by the Chinese from BYD
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This means the company’s annual sales fell 8.6% in 2025, marking its second consecutive annual decline, after a 1% decline in 2024.
The recent decline has allowed China’s BYD to overtake Tesla to become the world’s biggest seller of electric vehicles on an annual basis.
BYD, which has been aggressively expanding into Europe and the United Kingdom, sold 2.3 million all-electric cars last year, compared to Tesla’s 1.6 million.
Tesla sales hit by Musk’s involvement in politics
This comes as Musk has faced political backlash over his support for Donald Trump, his involvement in the White House cost-cutting project Doge, and his closeness to far-right movements such as Germany’s AfD and Tommy Robinson’s Advance UK.
Sales have also been hit by Joe Biden’s scrapping of subsidies for electric car purchases in the US in recent months, as well as the introduction of a new “luxury vehicle tax” in the UK on electric vehicles priced above £40,000.
The future of robots?
Elon Musk also tried to show that sales of electric cars are not the main indicator of Tesla’s success. He has increasingly focused on the company’s self-driving software, introducing a “Cybercab” without a steering wheel or pedals and launching a robotaxi service in Texas and California.
He also made ambitious promises related to Optimus robotics technology, stating that robot sales could surpass automobile sales and that Optimus robots could eventually outnumber humans.
In November, shareholders approved a pay package for Musk that could make him the world’s first billionaire if he manages to sell a million robots and get a million self-driving taxis on the road.
For this, Musk would also have to multiply Tesla’s stock price so that the company reaches a valuation of $8.5 trillion. Those promises have driven Tesla’s stock to an all-time high in recent months, with the company reaching a market value of $1.4 trillion.
Sales of Tesla cars have also been hurt by waning enthusiasm for electric vehicles and increased competition from China, including BYD.
BYD’s success in Europe
BYD, whose name stands for “Build Your Dreams”, has been China’s largest seller of electric vehicles for many years, but since 2024 it has rapidly expanded to the rest of the world, including the United Kingdom.
BYD sold 43,740 cars in the first 11 months of 2025 in the UK, almost six times more than 12 months earlier and more than Tesla’s total UK sales, which fell slightly to 39,227 in the same period.
However, BYD also faces its own pressures. Warren Buffett’s Berkshire Hathaway, which was an early investor in BYD, completed the sale of its stake last year, and BYD’s growth has slowed amid fierce competition.
Beijing has vowed to limit the price war between Chinese carmakers, saying it wants to end “irrational competition”. BYD has slowed production and expansion plans in recent months.
Tesla shares were trading slightly higher ahead of the open on Wall Street on Friday.