Tesla’s Sales Decline Amidst Increased Competition
Tesla (NASDAQ: TSLA) is one of only nine American companies with a market capitalization exceeding $1 trillion, currently valued at $1.38 trillion. However, the company is facing significant challenges, including a projected decline in electric vehicle (EV) sales for a second consecutive year, with sales expected to drop 8% in 2025, totaling around 1.64 million vehicles. Competition is intensifying, particularly from Chinese automaker BYD, which outperformed Tesla in Germany by selling more than twice as many EVs in November 2025.
Tesla’s stock is trading at a price-to-earnings (P/E) ratio of 293, making it the most expensive stock in the trillion-dollar club. Analysts predict that delays in bringing its Cybercab autonomous vehicle and Optimus robot to market—both projected for mass production in 2026—could lead to a sharp correction in Tesla’s stock price. In order for Tesla to exit the trillion-dollar club, its stock would need to fall by 28% next year.
Overall, 75% of Tesla’s anticipated $95 billion revenue in 2025 is expected to come from its EV business, which is under pressure due to increased competition and declining sales in key markets like Germany, Denmark, France, and Sweden.
