Tesla’s 2025 Sales Decline: Loses Global Crown, but AI and Robotaxi Prospects Remain Bright
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In early 2026, Tesla released its full-year 2025 performance data, a report that drew widespread attention. Tesla delivered around 1.636 million electric vehicles in 2025, a decline of approximately 9% year-on-year – marking the second consecutive year of falling sales. Even more notably, Chinese automaker BYD surpassed Tesla with 2.256 million pure electric vehicle sales, becoming the world’s largest electric vehicle manufacturer for the first time. This signalled the formal end of Tesla’s long-held position as sales leader.
The reasons for the sales decline were multifaceted. Firstly, competition in the global electric vehicle market has intensified, particularly in China and Europe, where rivals such as BYD, Kia, and Hyundai have launched more affordable models, capturing greater market share. Secondly, the US federal government’s $7,500 electric vehicle tax credit phased out during 2025, causing some demand to be pulled forward or lost. Additionally, CEO Elon Musk’s political positions sparked boycotts among some consumers, with reports suggesting this impacted the brand in Europe and the US.
Despite lacklustre vehicle deliveries, Tesla excelled in other areas. In the fourth quarter of 2025, the company deployed a record 14.2 GWh of energy storage products, with strong growth in the energy business throughout the year. This reflects Tesla’s diversification, moving beyond reliance on vehicle sales alone. At the same time, the share price rose about 11% in 2025, maintaining a market capitalisation above one trillion dollars, as investors placed greater emphasis on the company’s potential in artificial intelligence and autonomous driving.Looking to 2026, Tesla’s focus will shift towards Robotaxi and full self-driving technology. The company plans to begin volume production of the Cybercab – a dedicated autonomous taxi without steering wheel or pedals – in April. This model is expected to form the core of the Robotaxi network. Full Self-Driving (FSD) software will expand to more regions worldwide, with potential regulatory approval in Europe possibly in the first half of the year. Meanwhile, production of the Optimus humanoid robot is also advancing. Elon Musk has emphasised that 2026 will be a pivotal year for Tesla’s AI breakthroughs, aiming to achieve unsupervised autonomous driving and large-scale Robotaxi deployment.
Although short-term sales remain under pressure, Tesla’s transformation strategy has left many analysts optimistic. Some institutions predict that, with the explosion of Robotaxi and energy businesses, Tesla’s market capitalisation could rise further in 2026. Tesla’s story is no longer solely about electric vehicles; it is a grand vision for the future of transport and intelligent robotics. 2026 will be the crucial year to validate this vision.