Tesla shares fell 2.6% to $438.07 on Friday following a report of lower-than-expected fourth-quarter vehicle deliveries, allowing China's BYD to surpass it as the world's top EV seller for 2025. The company delivered 418,227 vehicles in the October-December period, down 15.6% from a year earlier, amid the end of U.S. federal tax credits. Investors now look to Tesla's January 28 earnings for signs of demand recovery and updates on robotics and autonomy.
Tesla's fourth-quarter delivery figures, released in an early January filing, showed the company handed over 418,227 vehicles, missing analyst expectations of 434,487 compiled by Visible Alpha. Production reached 434,358 units, with Model 3 and Model Y accounting for 406,585 deliveries and other models totaling 11,642. For the full year 2025, Tesla reported 1,636,129 vehicle deliveries, a decline from 1.79 million in 2024, even as global EV sales rose 28%.
The results highlighted intensifying competition, particularly from BYD, which sold 2.26 million EVs in 2025, a 27.9% increase, and achieved record overseas sales of 1,046,083 units while targeting up to 1.6 million outside China in 2026. In the U.S., the expiration of the $7,500 federal tax credit at the end of September contributed to softer demand, with EVs comprising just 6.2% of retail vehicle sales in the quarter—down 3.6 percentage points from the prior year—and average transaction prices climbing nearly $6,000 to $53,300, per J.D. Power data.
Europe presented a mixed picture: Tesla registrations, a sales proxy, dropped 66% in France and 71% in Sweden in December but surged 89% in Norway. To counter volume pressures, Tesla introduced lower-priced 'Standard' versions of the Model Y and Model 3, about $5,000 below previous base models, though some investors sought deeper cuts or new affordable options.
On a positive note, Tesla deployed a record 14.2 gigawatt-hours of energy storage products in the quarter, totaling 46.7 GWh for 2025. The stock's reaction underscored its sensitivity to core auto performance, despite optimism around future ventures. 'Investors are so focused on the future with Tesla that they are ignoring delivery numbers. It’s about Optimus, Robotaxi and physical AI,' said Dennis Dick, a trader at Triple D Trading, which holds Tesla shares.
Broader industry challenges were evident, as Rivian reported 2025 deliveries of 42,247 vehicles, down 18% year-over-year. Tesla shares traded between $435.33 and $462.42 on Friday amid 85.5 million shares in volume. Upcoming catalysts include the January 28 earnings release after market close, with a webcast at 5:30 p.m. ET, alongside macroeconomic data like the U.S. jobs report on January 9 and consumer price index on January 13.
