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https://www.foxla.com/tag/technologySUGGESTED VIDEO: Tesla unveils cheaper version of Model Y
The Model Y Standard is rear-wheel drive and will start at $39,990.
LOS ANGELES - Tesla cedes its crown as the world’s bestselling electric vehicle maker on Friday as a customer revolt over Elon Musk’s right-wing politics, expiring U.S. tax breaks for buyers and stiff overseas competition pushed sales down for a second year in a row.
What we know:
Tesla said that it delivered 1.64 million vehicles in 2025, down 9% from a year earlier.
Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.
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It’s a stunning reversal for a car company whose rise once seemed unstoppable as it overtook traditional automakers with far more resources and helped make Musk the world’s richest man.
By the numbers:
1.64 million: Total Tesla vehicles delivered in 2025.
2.26 million: Total battery electric vehicles sold by BYD in 2025.
9%: The year-over-year percentage drop in Tesla's annual sales.
$7,500: The value of the U.S. federal tax credit that expired in September 2025.
$436.85: Tesla's stock price during afternoon trading on Friday.
Why you should care:
The shift in market leadership signals a major turning point in the global automotive industry, as Chinese manufacturers leverage lower production costs and rapid innovation to outpace American firms.
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For U.S. consumers, the expiration of federal tax credits makes electric vehicles significantly more expensive, potentially slowing the transition to green energy despite the introduction of lower-priced versions of the Model 3 and Model Y.
What they're saying:
Investors remain divided on the company’s trajectory.
Wedbush Securities analyst Dan Ives noted that "regulatory is going to be a big issue" regarding self-driving technology, but remains bullish on Tesla's AI-driven future.
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Meanwhile, CEO Elon Musk continues to emphasize that the future of the company lies with its driverless robotaxis service, its energy storage business, and building robots for the home and factory—and much less with car sales.
What's next:
Tesla is scheduled to release its full fourth-quarter earnings in late January, with analysts bracing for a nearly 40% drop in earnings per share.
Looking further ahead, the company plans to begin production of its AI-powered "Cybercab"—a vehicle with no steering wheel or pedals—in 2026.
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All eyes are also on Elon Musk’s rocket company, SpaceX, which may see a blockbuster initial public offering later this year.
The Source: This report is based on official delivery data and financial disclosures released by Tesla Inc. and BYD Co. Ltd. on January 2, 2026. We have further verified these figures through market analysis from FactSet and Bloomberg, alongside regulatory updates regarding the phased-out federal EV tax credits and ongoing safety probes in California. The Associated Press contributed.