Tesla EV sales fall short of Wall Street's low expectations

By William Gavin

The company was also out-sold by China-based chief rival BYD, which is likely the biggest seller of EVs for 2025

Tesla's rough year took it to its second straight annual sales decline.

Elon Musk's electric vehicle maker on Friday posted deliveries well below Wall Street's already-low expectations.

Austin, Texas-based Tesla (TSLA) said it delivered 418,227 vehicles to customers between October and December, compared with the 440,000 expected by Wall Street, according to FactSet estimates. Earlier this week, the company published a consensus of sell-side analyst expectations that forecast 422,850 units sold. Compared with a year earlier, Tesla's December quarter sales dropped 16%.

For 2025, Tesla's sold 1.63 million vehicles, falling short of the 1.78 million vehicles it delivered in 2024 and the 1.8 million sold in 2023. It's the company's second straight annual decline. When Tesla in 2024 failed to match its 2023 performance, it was the company's first year-over-year sales drop since 2011.

On Thursday, Tesla rival BYD (CN:002594)said its sales of battery electric vehicles rose 27% to 2.25 million, while plug-in hybrid car sales fell 7% to 2.25 million. The Chinese automaker's unaudited results would make it the biggest global seller of battery-powered vehicles for 2025.

Rivian Automotive (RIVN), one of only a few pure-EV companies in the U.S., on Friday said it sold 9,745 electric trucks and SUVs last quarter, 31% fewer units than it sold a year earlier. The California-based firm delivered 42,247 EVs in 2025, in line with company guidance but 18% fewer compared to its performance in 2024.

Earlier: China's BYD just raised the bar on EV sales. Tesla may struggle to catch up.

Tesla stock fell 1.9% in recent afternoon trading, and has fallen by more than 10% amid a seven-session losing streak, which would be longest such streak since the seven-day stretch that ended April 22, 2024, according to Dow Jones Market Data. Shares are also trading about 10% lower than Tesla's recent all-time closing high of $489.88 it achieved on December 16, 2025.

Tesla sold 406,585 Model Y sport-utility vehicles and Model 3 sedans, which overwhelmingly account for the bulk of its sales, last quarter. The company also sold 11,642 other vehicles, which it groups together when reporting deliveries. That includes the Model X SUV, Model S sedan and Cybertruck pickup truck.

Last year saw Tesla struggle in Europe after consumers rejected the company, largely over Musk's embrace of far-right political figures. It's also been losing market share to expanding Chinese automakers in Europe and China.

Sales in the U.S. got a boost in the third quarter as consumers took advantage of tax credits that expired at the end of September. Gene Munster, managing partner at Deepwater Asset Management, estimates that added 55,000 deliveries to Tesla's record quarter that would have otherwise been spread through the following two quarters.

Analysts expect U.S. electric car sales to be slightly weaker over the next few quarters as affordability remains a barrier for some consumers to purchase EVs. That will impact EV sellers across the industry, although some expect Tesla to ultimately benefit.

"Only brands with strong products, cost discipline, and loyalty are positioned to keep/gain [market] share. That's a good thing for Tesla," wrote Canaccord Genuity analyst George Gianarikas in Dec. 22 note to investors.

Despite the company's focus on artificial-intelligence, the EV business still accounts for the majority of Tesla's revenue. Analysts expect Tesla to report $70.8 billion in automotive revenue for 2025, down from $77 billion a year earlier, according to FactSet estimates.

Tesla on Friday also said it delivered a record 14.2 gigawatt-hours of energy storage products in the December quarter, showing the growth of its energy business. Its previous record was set in the third quarter of 2025, when it deployed 12.5 GWh of energy storage products.

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Tesla's stock rose 11.4% in 2025, compared with the S&P 500 index's SPX 16.4% gain.

-William Gavin

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01-02-26 1452ET