Tesla’s Declining EV Sales and Revenue Impact
Tesla’s electric vehicle (EV) sales have been on a downward trend, delivering 1.79 million vehicles in 2024 (a 1% decline) and falling to 1.63 million in 2025, representing a 9% year-over-year drop. As a result, the company’s automotive revenue decreased by 10%, contributing to a 47% plunge in earnings per share (EPS) to $1.08. Currently, 73% of Tesla’s revenue still comes from its EV business, which is facing increased competition from lower-cost models such as China’s BYD, which outsold Tesla globally for the first time in 2025.
Future Products and Valuation Concerns
Tesla is pivoting towards future products like the Cybercab robotaxi and the Optimus humanoid robot, with potential long-term revenue implications. However, the Cybercab’s commercialization faces delays due to limited approval for its full-self-driving technology, currently only sanctioned in Austin, Texas. Tesla’s stock trades at a price-to-earnings (P/E) ratio of 377, making it significantly more expensive than its peers; it would need to drop 34% to exit the $1 trillion club, which it currently holds at a valuation of $1.5 trillion.
