The best-selling electric-car brand 12 months ago has seen sales slide around the world – allowing BYD to pull ahead – but there's more than one reason for the decline.
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Global deliveries of Tesla electric vehicles fell 12.9 per cent in the first quarter of 2025 compared to the same period last year, with 50,129 fewer customer hand-overs – the brand’s worst result in three years.
But there is help on the way, as production of the updated Model Y ramps up – the switch to the new model affecting deliveries in early 2025 – and a more affordable car due later this year.
Official figures released by the US electric car brand report 336,681 new Teslas were delivered to customers globally from January 1 to March 31, 2025, compared to 386,810 in the first three months of 2024.
Australian Tesla sales figures provided by the EV Council show a 59.7 per cent fall in the first quarter of 2025 compared to the same period in 2024, with a 53 per cent decline in March 2025 alone when electric vehicles made up a record 14.25 per cent share of overall new car sales.
“We knew 1Q [first-quarter] Tesla deliveries would be soft but these numbers were bad,” Dan Ives from investment firm Wedbush Securities told CNBC.
“We are not going to look at these numbers with rose-coloured glasses; they were a disaster on every metric. Refresh [Model Y production ramp-up] issues [were part of it], but [Tesla's] brand crisis [is] key.”
Overall electric vehicle sales results for Q1 2025 are not yet published, but rivals recording higher electric vehicle sales according to Motor1 included General Motors (94 per cent), BMW (26.4 per cent) and Ford (11.5 per cent).
Reports from Car News China claim BYD has now overtaken Tesla for the second consecutive quarter, delivering 416,388 battery electric vehicles in the first quarter of 2025 – a 60 per cent surge over 2024.
It’s the third time BYD has beaten Tesla over a three-month period, having done so for the first time between October-December 2023, and again in the final three months of 2024.
BYD is also not yet on sale in the United States – the world’s biggest new-vehicle market outside of China – where automotive tariffs on automotive imports threaten ‘global chaos’.
“CEO Elon Musk has scored somewhat of an own goal against Tesla, and we are about to glimpse how much the company’s sales were hurt in Q1 2025,” said Liz Lee, director of analyst Counterpoint Associate, told Car News China.
“This is a big opportunity for BYD, and if they deliver on the fast-charging promise, this could be the turning point for BYD and the global China BEV story.”
It said the switch to the updated Model 3 cost it several weeks of production, resulting in fewer customer deliveries.
With the changeover complete and Musk set to step back from his role in the US government, Tesla shares rose in value after the latest figures were released.
Upcoming product launches which in Australia are set to include the Model Y Performance version, with the Tesla Robotaxi scheduled to be launched in June 2025.
“We think Tesla sentiment can change rapidly once catalysts [new products] emerge, and the next few months are catalyst-rich,” Alex Pottinger from US investment firm Piper Sandler told Fortune.
The Tesla Model Y – following price reductions of up to $4500 – was still the best-selling electric car in Australia in March 2025 after topping full-year electric car sales in 2024.
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