Tesla has released preliminary global sales figures for 2025 that show a second consecutive year of declining sales, with the decline even greater than the 1.1 percent decline the company recorded in its first annual sales decline in 2024.
The electric vehicle (EV) maker has said it will announce sales of 1,640,752 vehicles in 2025, up from 1,704,093 vehicles in 2024. This forecast means it will lose its status as the world’s leading electric vehicle manufacturer to China BYD.
The 3.7 percent annual sales decline marks the second straight year of falling sales for the U.S. electric vehicle giant after a tumultuous year that saw the unveiling of an updated Model Y that remains on track to become the best-selling electric vehicle model in the world.
Figures from China show BYD sold a total of 4.6 million vehicles worldwide in 2025, of which 2.2 million were electric vehicles, giving BYD the top spot in electric vehicle sales after missing out on Tesla in 2024.
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Tesla CEO Elon Musk – still the richest person in the world according to Forbes – has predicted the brand will grow to 1.75 million sales in 2026 and reach the ambitious four million vehicle mark by 2027.
Tesla sales fell 16 percent year-on-year to 423,000 vehicles in the October-December 2025 quarter.
The automaker posted a 37 percent drop in profits in the July-August period after posting its worst quarterly loss in a decade in April-June 2025.
Tesla pointed to production changes for the new Model Y and updated Model 3 as factors in the sales decline in early 2025, but it also cited a number of factors as the cause of the brand’s lower volume.
While Tesla faced challenges from automotive tariffs with production in China, Germany and the United States, the company also suffered significant sales losses in Europe and Australia in early 2025, which was seen as a backlash against Mr. Musk’s role with the U.S. government.
Other controversies included reports of attempts by board members to oust Mr. Musk as CEO (later denied), a role he has held since 2008, while in November 2025, despite some opposition, a US$1 trillion (A$1.5 trillion) compensation package for Mr. Musk was approved by shareholders in November 2025.
In the middle of the year, the company launched its first robotaxi operation, which began in Austin, Texas and later expanded to San Francisco, but fell far short of the promised 500 robotaxi in Austin and 1,000 in San Francisco.
Full autonomous driving (supervised) was introduced in Australia and New Zealand in September 2025 for certain Model 3 and Model Y variants.
According to the EV Council’s latest available figures for Australia as of November 30, 2025, Tesla BYD leads the EV sales race with more than 5,000 vehicles and 26,271 vehicles, but is on track to finish well below the 38,347 Teslas sold in Australia in 2024, again a decline of 16.9 percent compared to 2023.
Despite the challenges, the Model Y is expected to be the best-selling electric vehicle in Australia, with a tally of 20,241 as of November 30, almost double that of the second best-selling BYD Sealion 7 (10,864).
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