Tesla's electric vehicle sales declined in 2025, resulting in BYD surpassing the company as the world's largest seller of electric cars. The company reported a 16 percent decrease in car sales during the last three months of 2025. Overall sales for the year fell by 9 percent, even as other automakers experienced gains.
The decline in sales followed the elimination of federal tax credits, previously intended to encourage Americans to purchase electric vehicles, by Congress and President Trump. Tesla's shift in focus towards self-driving cars and humanoid robots, technologies that have yet to generate significant revenue, also contributed to the sales decrease. Elon Musk, Tesla's chief executive, had previously set a target of selling 20 million cars a year by 2030.
Despite the drop in sales, Tesla remains the largest American manufacturer of electric vehicles. The company's slumping sales, however, suggest a potential slowdown in the United States for electric vehicle technology.
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