Tesla Experiences Record Sales Decline in 2025
Tesla (NASDAQ: TSLA) reported a total of 1.63 million electric vehicle (EV) deliveries in 2025, marking an 8.5% drop from 2024 and the largest annual sales decline in the company’s history. In the fourth quarter alone, Tesla delivered 418,227 EVs, falling short of Wall Street’s forecast of 422,850. This sharp decline can be attributed to escalating competition from lower-cost brands like BYD, which sold its entry-level Dolphin Surf EV for $26,900 in Europe, significantly undercutting Tesla’s Model 3 starting at over $40,000.
Despite these challenges, Tesla maintains a high market valuation, with a price-to-earnings (P/E) ratio of 292. However, this valuation raises concerns as the company faces stagnant revenue from its core EV business during a time when it is also investing in future products like the Cybercab autonomous robotaxi, projected for mass production by late 2026, and the Optimus humanoid robot. Investors are apprehensive about the company’s ability to maintain its market position as it reports fourth-quarter operating results on January 28, where a significant drop in profits is anticipated due to weak EV sales.
