Tesla's sales decline worsens – electric vehicle market under pressure

The electric vehicle sector shows signs of market cooling. Tesla (TSLA.O) announced significantly weaker delivery figures for Q4 on Friday, confirming a concerning trend: for the second consecutive time, the company's annual sales have declined.

Deliveries fall significantly short of expectations

The figures paint a clear picture of the pressure faced by the electric vehicle manufacturer. In Q4, Tesla delivered only 418,227 vehicles — well below the 434,487 units expected by analysts and considerably lower than the 495,570 vehicles in the same quarter last year. The total for the year ended at 1.64 million deliveries, whereas analysts had previously expected around 1.65 million. Compared to 2024 with 1.79 million vehicles, this shows a significant decline.

Removal of incentives weighs on demand

Part of the problems for the electric vehicle producer stem from the elimination of tax incentives, which noticeably slowed demand development. Additionally, increasing competition and market uncertainty in key regions such as North America and Europe, where competing brands are establishing themselves more and more, contribute to the challenges.

Focus on robotics and autonomous systems

Despite the difficult market conditions, Tesla is focusing on long-term growth projects. The company is investing in robotics and autonomous driving to justify its high valuation and to compensate for declining vehicle sales. Whether this strategy can offset the weaknesses in its core business remains uncertain.

Stock price rose despite decline

Surprisingly, Tesla's stock price increased by about 11.4% in 2025, reflecting investor confidence and increasing Elon Musk's wealth. This suggests that the market views the company's future projects positively, despite the current declines in electric vehicle sales.