World's wealthiest CEO delivers second annual sales decline

Tesla $TSLA's annual sales have dropped for the second year in a row, the company said Friday.

The Elon Musk-led electric vehicle maker delivered 1.64 million cars last year, a 9% fall from the 1.79 million it shipped in 2024. It delivered 418,227 vehicles in the final quarter of 2025, down 16% year-over-year and missing analyst expectations for 441,000 vehicles, according to an average compiled by Bloomberg.

On Monday, Tesla took the unusual step of publishing a consensus estimate, which predicted the automaker would deliver 422,850 vehicles in Q4 — a modest estimate the EV maker ultimately missed.

The annual results snatch Tesla's crown as the world’s biggest electric-vehicle maker, overtaken by Chinese rival BYD.

BYD said on Thursday that it sold 2.26 million battery-electric vehicles in 2025, up 28% from a year ago, following its expansion in Europe and other overseas markets. The automaker had previously outsold Tesla on a quarterly basis, but Friday’s results mean it has now overtaken Tesla for annual EV deliveries.

Tesla had a bumpy ride in 2025. The company's share price fell 21.3% in the first half of the year due to a number of headwinds, including Musk's alienating political rhetoric, fiercer competition from Chinese and legacy U.S. automakers, and concerns among investors that the CEO's role heading the Department of Government Efficiency (DOGE) would cause him to neglect his businesses.

Tesla was also stung by federal EV tax credits — $7,500 for new EVs and $4,000 for used — expiring on Sept. 30, 2025. Tesla’s November U.S. sales fell nearly 23% year over year to 39,800 vehicles, according to Cox Automotive data, even after Tesla rolled out cheaper (but still not that cheap) “Standard” versions of the Model Y and Model 3.

However, Tesla's stock price has had a renaissance in recent weeks, hitting an all-time closing high of $489.88 in December. The rally came after Musk said the company had been testing driverless vehicles in Austin, Texas, with no occupants on board for the first time, almost six months after launching a pilot with safety drivers.

Tesla's second consecutive annual drop in sales came as its board reinstated Musk as the highest-paid CEO in history, with a new pay package of 96 million restricted shares worth $29 billion. His original 2018 moonshot mega-grant had been tied up in Delaware courts for seven years after a judge twice rescinded the package.

During litigation, Tesla moved to Texas from Delaware, and the board adopted a rule requiring any investor who wants to challenge Musk’s pay to hold 3% of the company's stock. The amount is equivalent to roughly $44 billion at current market price, helping to shield Musk against repeat challenges to his pay plan. 

On top of this, Tesla's shareholders voted in November to approve the largest remuneration package in history that could see Musk pocket as much as $1 trillion in stock over the next decade, although required payments would reduce this to a modest $878 billion.

So, despite Tesla's enduring slump, Musk defended his title as the world's richest person last year, driven by Tesla pay packages and the soaring valuation of his rocket and satellite company SpaceX. Musk's fortunes approached an estimated $623 billion in 2025, up by more than $190 billion.