Jan 2 (Reuters) – Tesla reported a bigger-than-expected fall in fourth-quarter deliveries on Friday and posted a second straight decline in annual sales, as it struggled to whip up demand for its electric vehicles following the withdrawal of tax subsidies.
The tally raises questions about whether Tesla can stabilize its core auto business following two consecutive years of sales declines, even as it pivots to futuristic projects such as robotics and self-driving cars to justify its steep valuation.
Tesla said it delivered 418,227 vehicles in the October–December quarter, down from 495,570 a year earlier. Analysts expected 434,487 vehicles, according to Visible Alpha.
For the full year, Tesla delivered 1.64 million vehicles, compared with 1.79 million in 2024. Analysts polled by Visible Alpha had expected deliveries of about 1.65 million vehicles, marking the company’s second consecutive annual decline.
Tesla’s fourth-quarter figures come after third-quarter deliveries were supported by a rush to lock in U.S. EV tax credits before they expired at the end of September, followed by a sharper slowdown as incentives rolled off.
EV demand has softened across the industry since the end of September, when the Trump administration ended $7,500 federal tax credits, with Tesla also facing rising competition globally.
Tesla in October launched stripped-down “Standard” versions of the Model Y and Model 3, priced about $5,000 below the previous base models, as it sought to defend volumes after the tax credit loss.
Analysts have said Tesla’s steepest pressure in 2025 has been in North America and Europe, where competition has intensified and the company also faced brand backlash earlier in the year tied to Musk’s political rhetoric.
Even as vehicle deliveries have weakened, Tesla shares have risen about 11.4% in 2025, boosting Musk’s wealth.
Investor enthusiasm in Tesla increasingly centers on Musk’s push to expand robotaxis, improve self-driving tech and build humanoid robots, even though EV sales still account for the vast majority of Tesla’s current revenue.
(Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva)
