For the first time in its corporate history, Tesla reported an annual decline in revenue in 2025. The sharp decline reflected weakening vehicle demand, aggressive price reductions across key markets, and rising costs tied to Tesla’s expanding ambitions beyond electric cars. Chinese automaker BYD overtook Tesla as the world’s largest electric vehicle manufacturer by volume, selling around 2.26 million vehicles globally in 2025. The company announced plans to discontinue the Model S sedan and Model X SUV in 2026, ending production of two vehicles that once defined the firm’s premium brand. Together, the Model S and X now account for a small portion of total sales but carry higher production costs compared with newer models.