Tesla Fourth-Quarter Deliveries Drop 16%, Underscoring Ongoing Sales Slowdown

Tesla disclosed its fourth-quarter 2025 production and delivery figures on Friday, reporting 418,227 vehicles handed over to customers and 434,358 units produced. The delivery total missed Wall Street’s 426,000-vehicle consensus compiled by StreetAccount and stood 16% below the 495,570 vehicles delivered in the same period a year earlier. Production declined 5.5% year on year, falling from 459,445 units in the fourth quarter of 2024.

The latest results extend a downward trend that began the previous year. For all of 2025, Tesla delivered 1.64 million vehicles, an 8.6% decrease from the 1.79 million units recorded in 2024. Annual production reached 1.65 million vehicles, largely in line with deliveries but also down on a year-over-year basis.

Model Mix Remains Concentrated in Entry Segments

Lower-priced models continued to dominate Tesla’s portfolio. The Model 3 sedan and Model Y sport-utility vehicle accounted for 406,585 fourth-quarter deliveries, or about 97% of the total. Combined deliveries of the higher-priced Model S and Model X, along with the Cybertruck pickup, reached 11,642 units. Despite more than one million early reservations following its design debut, the Cybertruck has yet to establish a significant share of Tesla’s overall volume. SpaceX, another company led by Elon Musk, purchased tens of millions of dollars’ worth of Cybertrucks during 2025, but the internal order did little to alter the broader sales trend.

Competitive Landscape Intensifies

The company continues to face expanding competition across major markets. China’s BYD, South Korea’s Kia and Hyundai, and Germany’s Volkswagen all increased electric-vehicle shipments during the year. BYD, in particular, reported 2.26 million battery-electric vehicles sold in 2025, surpassing Tesla’s global total and marking a 28% annual increase for the Chinese automaker.

Tesla’s position in Europe weakened over the same period. Data from the European Automobile Manufacturers’ Association show the company’s regional registrations falling 39% in the first 11 months of 2025, while BYD’s registrations gained 240%. Battery-electric vehicles achieved an estimated 16% share of overall European new-car sales during the year, illustrating a market that is growing but becoming more crowded.

Policy Change and Consumer Backlash Impact U.S. Demand

Domestic deliveries were affected by President Donald Trump’s decision to terminate a federal electric-vehicle incentive program on Sept. 30, several months earlier than previously scheduled. The expiration prompted many consumers to accelerate purchases into the third quarter, leaving reduced demand for the final three months of the year. Additionally, Tesla has grappled with backlash in the United States and Europe following a series of controversial political statements and endorsements by Musk, which some industry observers believe have weighed on brand perception.

Energy Storage Sets New Quarterly Record

Tesla’s energy division continued to expand. The company deployed 14.2 gigawatt-hours of battery-storage systems in the fourth quarter, surpassing the prior quarter’s 12.5 GWh record. The product mix ranges from home backup batteries to large-scale installations for utilities and data centers. Broader adoption of stationary storage is occurring alongside a global push for grid resilience, as highlighted in a recent International Energy Agency report.

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Stock Performance and Executive Compensation

Although Tesla shares fell 2.59% on the day the delivery data were released, the stock remained well above early-year levels after a 40% rally in the third quarter and a new record high in mid-December. In November, shareholders approved a performance-based compensation package valued at up to $1 trillion for Musk. The plan grants the chief executive additional equity and voting power, and its passage followed Musk’s statement that he might reduce his involvement with the company if the package were rejected.

Outlook

Tesla introduced a lower-priced Standard Range version of the Model Y in October, a move some analysts believe could help stabilize volumes in 2026. Research from Cannacord Genuity points to rising electric-vehicle adoption in emerging markets such as Thailand, Vietnam and Brazil, offering potential long-term growth opportunities even as competition from Chinese manufacturers—including BYD, Xiaomi and Geely—intensifies.

Investors are also watching Tesla’s efforts to commercialize autonomous “robotaxi” services and humanoid robots, initiatives Musk collectively frames as steps toward “sustainable abundance.” The company is scheduled to report fourth-quarter financial results on Jan. 28, when additional insight into margins, cash flow and capital spending is expected.

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