While Tesla has dominated the electric vehicle market for years, the company is bracing for a significant downturn in 2025. Cox Automotive’s latest projections paint a grim picture—an 8.9% decline in U.S. deliveries. That’s a drop from 634,000 vehicles in 2024 to a measly 577,000 in 2025. Not exactly the growth story Tesla fans have been banking on.
The end of the federal EV tax credit is hitting Tesla where it hurts. Consumers who might have stretched their budgets for a Tesla are now thinking twice. No incentive? No sale. Premium pricing suddenly looks a lot less attractive when Uncle Sam isn’t chipping in. Tough break.
Q4 2025 looks particularly brutal. Analysts expect a 29.8% sales nosedive compared to Q3, and a 22.4% plunge year-over-year. Seasonal trends won’t help either. Tesla’s resilience is about to get a serious stress test.
It’s not just an American problem. Tesla’s international markets are crumbling too. German sales collapsed 60% in January 2025, with registrations limping in at just 1,277 units. The KBA reports a staggering 65.5% decline so far in 2025. Ouch.
China isn’t looking any better. Sales plummeted 49.2% from February 2024 levels. Remember when China was Tesla’s golden goose? Those days might be over.
Tesla did produce 410,244 vehicles in Q2 2025 and delivered 384,122 units. Most were Model 3/Y variants—the bread and butter of Tesla’s lineup. But production numbers won’t matter if buyers aren’t biting.
The competition isn’t making things easier. Everyone and their mother has an EV on the market now. Tesla’s introducing lower-priced Model 3/Y variants to stem the bleeding, but it might be too little, too late. The company’s inventory has skyrocketed from 40 days of supply to 149 days of supply, reflecting diminishing consumer demand.
Even more concerning, multiple Tesla executives selling substantial amounts of their personal shares suggests internal doubts about the company’s future prospects.
For a company that’s been defying gravity for years, 2025 could be the year Tesla finally comes back down to earth. Gravity’s funny that way. It always wins eventually.
