Tesla’s annual sales have dropped for the second year in a row, with 1.64 million cars delivered in 2025, down 9% from the previous year. This missed analyst expectations and marks the company’s second consecutive annual sales decline.

Chinese rival BYD has overtaken Tesla as the world’s biggest electric-vehicle maker, selling 2.26 million battery-electric vehicles in 2025, up 28% from the previous year. BYD’s expansion in Europe and other overseas markets has contributed to its growth.

Tesla faced challenges in 2025, including a 21.3% drop in share price in the first half of the year. Factors included Musk’s alienating political rhetoric, competition from Chinese and U.S. automakers, and concerns over his role heading the Department of Government Efficiency.

Federal EV tax credits expiring in September 2025 impacted Tesla’s U.S. sales, which fell nearly 23% year over year in November. Despite introducing cheaper versions of the Model Y and Model 3, the company saw a decline in sales.

Tesla’s stock price has rebounded, reaching an all-time high in December after Musk announced successful testing of driverless vehicles in Austin, Texas. The company’s recent success followed challenges earlier in the year.

Musk has been reinstated as the highest-paid CEO in history by Tesla’s board, with a new pay package of 96 million restricted shares worth $29 billion. This decision comes after years of legal battles over Musk’s original moonshot mega-grant.

During litigation over Musk’s pay, Tesla moved to Texas and implemented a rule requiring investors challenging Musk’s compensation to hold 3% of the company’s stock, equivalent to about $44 billion. This measure aims to protect Musk from future challenges to his pay plan.

Read more at Yahoo Finance: Elon Musk keeps getting richer as Tesla loses EV lead