Tesla reported that it produced 434,358 vehicles and delivered 418,227 units in the fourth quarter of 2025, a 15.6% decline from the 495,570 deliveries recorded in Q4 2024. Energy storage deployments reached a record 14.2 GWh, up 29% year‑over‑year and exceeding the 13.4 GWh forecasted by analysts.
The decline in deliveries marks the second consecutive year of falling numbers for the company. Full‑year 2025 deliveries totaled 1,636,129, down 8.5% from 1,789,226 in 2024. In 2025, BYD sold 2.26 million battery‑electric cars, overtaking Tesla’s 1.63 million deliveries and becoming the world’s largest EV seller.
Tesla’s delivery shortfall is largely attributable to the expiration of the U.S. federal EV tax credit at the end of September 2025, which pushed many buyers forward into Q3 and left fewer vehicles in the pipeline for Q4. Competition from Chinese rivals, especially BYD’s aggressive pricing and expanding product lineup, further eroded Tesla’s market share. The company also faced pressure from political scrutiny of its CEO, which dampened consumer sentiment in key markets.
Energy storage, however, delivered a strong performance. The 14.2 GWh deployment beat the 13.4 GWh consensus estimate by 0.8 GWh, a 6% outperformance. The segment’s higher margins and growing demand for home and grid‑scale storage have helped offset the automotive slowdown and contributed positively to Tesla’s free‑cash‑flow profile.
Management highlighted the strategic importance of the energy business and future vehicle plans. CEO Elon Musk said the energy division would “far outpace” the EV business, while CFO Vaibhav Taneja noted that the Shanghai Megafactory’s ramp‑up is helping the company avoid tariffs and maintain production flexibility.
Market reaction to the results was mixed. Investors focused on the record energy storage deployment and the company’s long‑term bets on AI, autonomous driving, and robotaxi services, while remaining cautious about the continued decline in vehicle deliveries and the competitive pressure from BYD. The company’s free‑cash‑flow strength and ongoing investment in lower‑cost models and AI suggest a strategic pivot to sustain growth in a tightening market.
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