Tesla's Slip: A New Leader in Electric Cars Emerges

Tesla, once the king of electric vehicles (EVs), has been dethroned. In 2025, it sold fewer cars than the previous year, marking a second consecutive year of decline. BYD, a Chinese automaker, took the top spot, selling more than 2 million EVs, while Tesla delivered about 1. 6 million. Several factors contributed to Tesla's decline. Customer dissatisfaction with Elon Musk's political views, the end of a $7, 500 U. S. tax credit for EV buyers, and tough competition from overseas, particularly China, played significant roles. In the last quarter of 2025, Tesla's sales were even lower than expected, with only 418, 227 vehicles delivered. This was below the already reduced target of 440, 000 set by analysts. Despite these challenges, investors remain optimistic about Tesla's future. They are betting on Musk's plans to lead in robotaxi services and humanoid robots. Tesla's stock even ended 2025 with an 11% gain. The company introduced cheaper versions of its Model Y and Model 3 in October, hoping to boost sales and compete better in Europe and Asia.Looking ahead, analysts predict a further drop in sales and profits for Tesla in early 2026. However, they expect these trends to reverse as the year progresses. Tesla is also facing regulatory challenges, including potential loss of its license to sell cars in California due to safety concerns. Tesla is expanding its robotaxi service, starting in Austin. It plans to roll out this service in more cities this year, competing with established players like Waymo. The company is also working on a new AI-powered Cybercab, set to begin production in 2026. To keep Musk focused on Tesla, the company's directors awarded him a significant new pay package, which shareholders approved in November. Additionally, Musk recently won a legal battle that restored a $55 billion pay package from 2018. He could become the world's first trillionaire later this year if SpaceX's initial public offering is successful.