By Tesla reported a second consecutive annual decline in vehicle sales, and while the market initially appeared unfazed, selling pressure mounted as investors digested the weaker delivery numbers amid a shifting narrative around the company’s future.
The electric-vehicle maker delivered 418,227 vehicles in the fourth quarter, slightly below Wall Street expectations of around 423,000 units.
Although investors had braced for an even softer figure closer to 415,000, the relief was short-lived.
Tesla stock reversed early gains to trade down approximately 1% near $445, while the broader market also lost momentum, with the S&P 500 and Dow Jones Industrial Average turning lower.
Quarterly and full-year deliveries show contraction
The fourth-quarter result underscores a clear slowdown in Tesla’s core automotive business.
The company delivered roughly 497,000 vehicles in the third quarter of 2025 and about 496,000 vehicles in the fourth quarter of 2024, highlighting a sequential and year-on-year decline.
For the full year, Tesla sold 1,636,129 vehicles, down from 1,789,226 in 2024.
The company’s best annual performance remains 2023, when it delivered 1,808,581 vehicles.
The 2025 outcome confirms that Tesla has now recorded two consecutive years of falling annual deliveries.
The fourth-quarter drop had been widely anticipated. The federal government ended the $7,500 electric-vehicle purchase tax credit in September, effectively raising the upfront cost of EVs in the US.
That policy change also pulled demand forward into the third quarter, when Tesla posted a company record 497,099 deliveries.
European sales pressure deepens
Tesla’s challenges have been particularly visible in Europe. In France, the region’s third-largest car market after Germany and Britain, Tesla registrations—often used as a proxy for sales—fell 66% in December to 1,942 vehicles, according to data released by industry body PFA.
For the full year, registrations in France declined 37%.
Sweden saw an even sharper contraction. Tesla registrations dropped 71% in December to 821 vehicles, according to Mobility Sweden, and fell 70% over the full year.
These declines come despite Tesla rolling out cheaper versions of its Model Y and Model 3 across Europe, a strategy that had been expected to revive demand.
So far, those pricing adjustments have failed to meaningfully reverse the downturn.
Tesla’s European slowdown has been unfolding since late 2024, driven by intensifying competition from both established automakers and new entrants, an ageing vehicle lineup, and protests linked to CEO Elon Musk’s public praise of European right-wing political figures. Together, these factors have weighed on brand perception in several Western and Northern European markets.
Up to November, Tesla’s market share across Europe, Britain and the European Free Trade Association slipped to 1.7%, down from 2.4% in the same period a year earlier.
Beyond car sales
Predicting Tesla’s stock reaction to delivery declines has become increasingly difficult, as investors, in recent times, have appeared less focused on near-term vehicle volumes.
With deliveries now reported, investor attention is turning back to Tesla’s robotaxi business, launched in Austin, Texas, in June with safety monitors in the front passenger seat.
Musk has suggested those monitors could be removed in the future, a potential milestone that investors are increasingly viewing as central to Tesla’s longer-term valuation.
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