Post by : Badri Ariffin

Tesla, a once-uncontested figure in the electric vehicle (EV) sector, has surrendered its title in 2025 due to a mix of political challenges, expired U.S. tax incentives, and intensified global competition. The automaker reported deliveries of 1.64 million vehicles last year, indicating a decline of 9% compared to 2024. Meanwhile, Chinese rival BYD achieved sales of 2.26 million EVs, securing its place as the leading EV manufacturer worldwide.

This shift underscores a crucial transformation in global EV market dynamics, as Tesla contends with obstacles that have impacted its growth trajectory following years of swift development. Despite endorsements from former U.S. President Donald Trump in early 2025, Tesla faced dwindling demand after the $7,500 federal tax credit ended in September.

In the fourth quarter alone, Tesla managed to sell 418,227 vehicles, falling short of expected figures of 440,000 as per FactSet analysts. This reduction reflects challenging market conditions exacerbated by stiff competition, particularly from Chinese manufacturers who are introducing more economical models.

To navigate these difficulties, Tesla rolled out simplified versions of the Model Y and Model 3 in October 2025, priced at below $40,000 and $37,000 respectively. These competitively priced variants aim to draw buyers in Europe and Asia, where Chinese EVs have gained notable traction.

Looking forward, analysts anticipate a further sales decline of approximately 3% and nearly a 40% drop in earnings per share in the upcoming quarterly report. Nevertheless, there is optimism about a turnaround in 2026, spurred by Tesla’s ventures into new domains.

CEO Elon Musk is shifting his sights from traditional vehicle sales to innovative technologies, including autonomous robotaxi services, energy storage solutions, and humanoid robots for home and industrial applications. Tesla kicked off a robotaxi pilot in Austin in mid-2025, with plans to broaden the service to other cities within the year. Success hinges on navigating regulatory challenges and competing with Waymo, a frontrunner in autonomous ride services.

Despite ongoing federal safety inquiries and the potential temporary suspension of Tesla’s California sales license over accusations of misleading self-driving claims, industry analysts such as Dan Ives from Wedbush Securities remain optimistic about Tesla’s autonomous vehicle prospects.

In late 2025, Tesla also acquired shareholder endorsement for a potentially massive remuneration package for Musk, accentuating faith in his leadership. Additionally, a recent ruling by the Delaware Supreme Court reinstated Musk’s $55 billion compensation package awarded in 2018.

Musk’s fortunes could escalate further with the expected public offering of SpaceX, potentially making him the world’s first trillionaire by late 2026.

#Global News