On January 2, 2026, Tesla published its eagerly anticipated fourth-quarter and full-year 2025 vehicle production and delivery numbers, confirming what many analysts and industry watchers had predicted: the electric vehicle (EV) giant posted its second consecutive annual decline in deliveries. Yet, in a surprising twist, Tesla’s stock price jumped in pre-market trading, climbing 2.5% as investors digested the news. The market’s optimism, despite the headline sales shortfall, reveals a deeper story about the company’s evolving business, investor expectations, and CEO Elon Musk’s outsized influence.
According to CNBC, Tesla delivered 418,227 vehicles in the last quarter of 2025, missing Wall Street’s consensus estimate of 426,000 units. Production for the quarter totaled 434,358 vehicles, down 5.5% from the 459,445 units produced in the same period a year earlier. For the full year, Tesla delivered 1.64 million vehicles—a drop of 8.6% compared to the 1.79 million delivered in 2024. It’s a notable reversal for a company that, not long ago, seemed unstoppable in its growth trajectory.
Breaking down the numbers further, the Model 3 sedan and Model Y SUV continued to dominate Tesla’s sales mix. In the fourth quarter, 406,585 of the vehicles delivered were Model 3 or Model Y, representing about 97% of total deliveries, as detailed in Tesla’s official production and deliveries report. The company’s higher-end models—Model S, Model X, and the much-hyped Cybertruck—accounted for just 11,642 deliveries in Q4. Despite a flurry of early reservations and a high-profile launch, the Cybertruck has yet to become a top seller. Interestingly, Musk’s other company, SpaceX, reportedly purchased tens of millions of dollars’ worth of Cybertrucks in 2025, according to CNBC.
Competition in the global EV market is heating up. Chinese automaker BYD surged past Tesla to become the world’s top EV seller in 2025, with BYD’s sales jumping 28% to 2.26 million units. In Europe, Tesla’s market share took a sharp hit—registrations fell 39% in the first 11 months of 2025, while BYD’s registrations soared by a staggering 240%. Battery electric vehicles now make up roughly 16% of new car sales in Europe, reflecting both the opportunity and the challenge for Tesla as rivals gain ground.
Another factor weighing on Tesla’s U.S. sales was the early expiration of the federal EV incentive. President Donald Trump’s decision to end the federal tax credit for electric vehicles on September 30, 2025, pulled some purchases forward into the third quarter. The end of this incentive, combined with rising competition, made for a tough sales environment in Q4. “The expiration pulled some EV sales forward to the third quarter for Tesla and other automakers,” CNBC reported.
But the company’s challenges haven’t been limited to market forces. CEO Elon Musk’s political statements and endorsements in 2025—including public support for Germany’s far-right AfD party and British activist Tommy Robinson, as well as calls to abolish the European Union—sparked a consumer backlash in both Europe and the United States. According to CNBC, Tesla has struggled to recover from the fallout, despite efforts to regain momentum, such as introducing a more affordable version of the Model Y in October 2025.
Yet, in a testament to Musk’s enduring appeal and the faith investors place in his vision, Tesla’s stock price rallied 40% in the third quarter of 2025, hitting a record high in mid-December. The optimism is fueled by more than just vehicle sales. Tesla’s energy business has become a bright spot: In Q4, the company deployed 14.2 gigawatt hours of battery energy storage systems, up from 12.5 GWh in the prior quarter. These systems, which range from residential backup batteries to massive installations for utilities and data centers, point to a future where Tesla’s fortunes are tied as much to energy technology as to cars.
For the full year, Tesla’s energy storage deployments reached 46.7 GWh. This expansion, highlighted in Tesla’s own reports, is helping to offset some of the pain from declining vehicle deliveries. Investors appear to be betting that Tesla’s energy segment, along with Musk’s ambitious plans for robotaxis and humanoid robots, will drive long-term growth. As CNBC put it, “Tesla is selling investors on Musk’s vision of the future, or what he calls ‘sustainable abundance,’ more than EV sales.”
Financial maneuvers have also played a role in bolstering confidence. In September 2025, Musk invested $1 billion of his own money into Tesla. Then, in November, shareholders approved a staggering $1 trillion compensation plan for Musk, cementing his control and equity in the company. Critics have questioned the plan, noting that it places no restrictions on Musk’s political activities and doesn’t require a minimum work commitment to Tesla. Still, the vote followed Musk’s threat to potentially leave the company if the plan wasn’t approved—a move that likely swayed many investors.
Not all the news has been about sales and compensation. On New Year’s Day 2026, Musk donated 210,000 Tesla shares, worth about $100 million, to undisclosed charitable organizations. According to TipRanks, the donation was part of year-end tax planning, and the recipients reportedly do not plan to sell the shares soon. For context, Musk’s estimated net worth was about $619 billion at the time, so while the gift is substantial, it’s a small slice of his overall fortune.
Looking ahead, Tesla will announce its fourth-quarter financial results on January 28, 2026. The company will host a live Q&A webcast that day at 4:30 p.m. Central Time (5:30 p.m. Eastern), with an archived version available on the company’s Investor Relations website. Tesla has cautioned that deliveries and storage deployments are just two measures of its financial performance, and that final results will depend on factors such as average selling price, cost of sales, and foreign exchange movements.
Analysts remain divided on Tesla’s prospects. According to TipRanks, the stock carries a Hold consensus rating, with 13 Buys, 11 Holds, and nine Sells. The average price target of $394.07 implies a potential downside of 12.4% from current levels. Still, some are optimistic about future growth, especially as EV adoption accelerates in emerging markets like Thailand, Vietnam, and Brazil. As analysts at Canaccord Genuity wrote, “EV adoption is rising quickly in emerging markets…where robust consumer interest could create meaningful long-term upside for Tesla, even as it faces fierce rivalry from Chinese automakers.”
For now, Tesla stands at a crossroads: facing declining sales and fierce competition, but buoyed by a dynamic energy business, Musk’s relentless ambition, and a loyal investor base willing to look past short-term setbacks in pursuit of a grander vision.
