At a Glance
- Tesla delivered 418,227 cars in Q4 2025, a 16% drop from Q3.
- Total 2025 deliveries fell 9% from 2024.
- BYD is projected to overtake Tesla in China and globally in 2025.
- Why it matters: The slump signals a shift in the EV market as incentives end and competition rises.
Tesla’s fourth-quarter deliveries slipped to 418,227 units, down 16% from the previous quarter, as the federal EV tax credit expires and newer competitors gain traction. The slowdown is mirrored by a 9% year-over-year decline in 2025, while rivals like BYD are poised to overtake Tesla in China and worldwide. Hybrid models are also gaining momentum, reshaping the industry landscape.
Tesla Delivery Decline
Tesla’s Q4 deliveries of 418,227 fell 16% from the 496,000 units shipped in Q3, reflecting a broader 9% drop in 2025 compared to 2024. The company’s new Model 3 and Model Y Standard variants, introduced in the fall, have not stemmed the sales decline, and Europe has seen a year-long slump. Despite aggressive incentives-0% financing for up to 72 months-sales pressure remains high.
- Q4 2025: 418,227 units
- Q3 2025: 496,000 units
- 2025 total: 1,636,129 units
- 2024 total: 1,775,000 units (approx.)
Competition and Market Shifts
BYD is expected to outsell Tesla in 2025, capturing markets once dominated by the electric-vehicle pioneer. Meanwhile, Lexus has reported record U.S. sales of its hybrid SUV lineup, indicating growing interest in gas-electric hybrids. Bloomberg notes that hybrids could become a significant growth driver as EV sales face headwinds.
- BYD projected to overtake Tesla in 2025
- Lexus record hybrid SUV sales in the U.S.
- Hybrid market growth highlighted by Bloomberg
Future Outlook and Industry Response
The end of the federal EV tax credit on September 30 pushed sales higher before the deadline, but automakers are adjusting launch plans for 2025-26 to counter expected demand slow-down. Tesla’s December 29 consensus, based on Wall Street analysts, projects deliveries rising from 1.64 million in 2025 to over 3 million by 2029, with the Model 3 and Model Y comprising 95% of 2025 output. The company will release its Q4 and full-year 2025 financial report on January 28.
| Year | Estimated Deliveries |
|---|---|
| 2025 | 1.64 million |
| 2029 | >3 million |
These estimates exclude the small share of other models, which together account for about 5% of 2025 deliveries.
Tyson Jominy stated:
> “The Model 3 and Model Y Standard versions are still being advertised with 0% financing for up to 72 months on the Tesla website, some of the most generous incentives by any automaker in the U.S. in December.”
Key Takeaways
- Tesla’s Q4 deliveries fell 16% from Q3, signaling a broader sales slowdown.
- BYD is set to surpass Tesla in China and globally by 2025.
- Hybrid sales are rising, and the federal tax credit’s end is reshaping launch plans.
Tesla’s delivery decline underscores the challenges the electric-vehicle market faces as incentives wane and competition intensifies.
