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Tesla no longer world's biggest EV maker as sales drop for second year

EV Update

Tesla sales were down yet again. Getty Images

Tesla lost its crown as the world’s bestselling electric vehicle maker as a customer revolt over Elon Musk’s right-wing politics, expiring U.S. tax breaks for buyers and stiff overseas competition pushed sales down for a second year in a row.

Tesla said that it delivered 1.64 million vehicles in 2025, down 9% from a year earlier.

Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.

It's a stunning reversal for a car company whose rise once seemed unstoppable as it overtook traditional automakers with far more resources and helped make Musk the world's richest man. The sales drop came despite President Donald Trump's marketing effort early last year when he called a press conference to praise Musk as a “patriot” in front of Teslas lined up on the White House driveway, then announced he would be buying one, bucking presidential precedent to not endorse private company products.

For the fourth quarter, Tesla sales totaled 418,227, falling short of even the much reduced 440,000 target that analysts recently polled by FactSet had expected. Sales were hit hard by the expiration of a $7,500 tax credit for electric vehicle purchases that was phased out by the Trump administration at the end of September.

Tesla stock fell 2.6% to $438.07 on Friday.

Even with multiple issues buffeting the company, investors are betting that Tesla CEO Musk can deliver on his ambitions to make Tesla a leader in robotaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices. Reflecting that optimism, the stock finished 2025 with a gain of approximately 11%.

The latest quarter was the first with sales of stripped-down versions of the Model Y and Model 3 that Musk unveiled in early October as part of an effort to revive sales. The new Model Y costs just under $40,000 while customers can buy the cheaper Model 3 for under $37,000. Those versions are expected to help Tesla compete with Chinese models in Europe and Asia.

For fourth-quarter earnings coming out in late January, analysts are expecting the company to post a 3% drop in sales and a nearly 40% drop in earnings per share, according to FactSet. Analysts expect the downward trend in sales and profits to eventually reverse itself as 2026 rolls along.

Musk said earlier last year that a “major rebound” in sales was underway, but investors were unruffled when that didn't pan out, choosing instead to focus on Musk's pivot to different parts of business. He has has been saying the future of the company lies with its driverless robotaxis service, its energy storage business and building robots for the home and factory — and much less with car sales.

Tesla started rolling out its robotaxi service in Austin in June, first with safety monitors in the cars to take over in case of trouble, then testing without them. The company hopes to roll out the service in several cities this year.

To do that successfully, it needs to take on rival Waymo, which has been operating autonomous taxis for years and has far more customers. It also will also have to contend with regulatory challenges. The company is under several federal safety investigations and other probes. In California, Tesla is at risk of temporarily losing its license to sell cars in the state after a judge there ruled it had misled customers about their safety.

“Regulatory is going to be a big issue,” said Wedbush Securities analyst Dan Ives, a well-known bull on the stock. “We're dealing with people's lives.”

Still, Ives said he expects Tesla's autonomous offerings will soon overcome any setbacks.

Musk has said he hopes software updates to his cars will enable hundreds of thousands of Tesla vehicles to operate autonomously with zero human intervention by the end of this year. The company is also planning to begin production of its AI-powered Cybercab with no steering wheel or pedals in 2026.

To keep Musk focused on the company, Tesla’s directors awarded Musk a potentially enormous new pay package that shareholders backed at the annual meeting in November.

Musk scored another huge windfall two weeks ago when the Delaware Supreme Court reversed a decision that deprived him of a $55 billion pay package that Tesla doled out in 2018.

Musk could become the world's first trillionaire later this year when he sells shares of his rocket company SpaceX to the public for the first time in what analysts expect would be a blockbuster initial public offering.

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Tesla sales are down to start the year. Getty Images

Tesla sales tumble 13% as Musk backlash, competition and aging lineup turn off buyers

Tesla Talk

Tesla sales fell 13% in the first three months of the year, another sign that Elon Musk’s once high-flying electric car company is struggling to attract buyers.

The double-digit drop is likely due to a combination of factors, including its aging lineup, competition from rivals and a backlash from Musk’s embrace of right wing politics. It also is a warning that the company’s first-quarter earnings report later this month could disappoint investors.

Tesla reported deliveries of 336,681 globally in the January to March quarter. The figure was down from sales of 387,000 in the same period a year ago. The decline came despite deep discounts, zero financing and other incentives.

Analysts polled by FactSet expected much higher deliveries of 408,000.

Dan Ives of Wedbush said in a note to clients that Tesla is seeing soft demand in the United States and China, as well as facing pressure in Europe.

“The brand crisis issues are clearly having a negative impact on Tesla...there is no debate,” he said.

Ives said that Wall Street financial analysts knew the first-quarter figures were likely to be bad, but that it was even worse than expected, calling them a “disaster on every metric.”

The sales drop came three weeks after President Donald Trump held an extraordinary press conference outside the White House in which he praised Tesla, blasted boycotts against the company and bought a Tesla himself while TV cameras rolled in an effort to help lift sales.

“I don’t like what’s happening to you,” said Trump, before slipping into a red Model S and exclaiming, “Wow. That’s beautiful.”

After falling as much as 6% in early Wednesday, Tesla stock shot up more than 5% in afternoon trading after a report from Politico, citing anonymous sources, that Musk may soon step down from leadership of his Department of Government Efficiency, the cost-cutting group that has led to tens of thousands of federal workers losing their jobs.

Tesla investors have complained the DOGE work has diverted Musk's focus from Tesla, where he is the CEO. On Tuesday, New York City's comptroller overseeing pension funds down $300 million this year on Tesla holdings called for a lawsuit accusing a distracted Musk of "driving Tesla off a financial cliff.”

Tesla’s stock has plunged by roughly half since hitting a mid-December record as expectations of a lighter regulatory touch and big profits with Donald Trump as president were replaced by fear that the boycott of Musk's cars and other problems could hit the company hard.

Analysts are still not sure exactly how much the fall in sales is due to the protests or other factors. Electric car sales have been sluggish in general, and Tesla in particular is suffering as car buyers hold off from buying its bestselling Model Y while waiting for an updated version.

Still, even bullish financial analysts who earlier downplayed the backlash to Musk’s polarizing political stances are acknowledging that it is hurting the company, something that Musk also recently acknowledged.

“This is a very expensive job,” Musk said at a Wisconsin rally on Sunday, referring to his DOGE role. “My Tesla stock and the stock of everyone who holds Tesla has gone roughly in half."

The protests come as the Austin, Texas electric vehicle maker faces fierce competition from other EV makers offering vastly improved models, including those of BYD. The Chinese EV giant unveiled in March a technology that allows it cars to charge up in just five to eight minutes.

Tesla is expected to report earnings of 48 cents per share for the first quarter later this month, up 7% from a year earlier, according to a survey of financial analysts who the car company by research firm FactSet.

Nearly all of Tesla’s sales in the quarter came from the smaller and less-expensive Models 3 and Y, with the company selling less than 13,000 more expensive models, which include X and S as well as the Cybertruck.

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Houston startup advances methane tech, sets sights on growth capital

making milestones

Houston-based climatech startup Aquanta Vision achieved key milestones in 2025 for its enhanced methane-detection app and has its focus set on future funding.

Among the achievements was the completion of the National Science Foundation’s Advanced Sensing and Computation for Environmental Decision-making (ASCEND) Engine. The program, based in Colorado and Wyoming, awarded a total of $3 million in grants to support the commercialization of projects that tackle critical resilience challenges, such as water security, wildfire prediction and response, and methane emissions.

Aquanta Vision’s funding went toward commercializing its NETxTEN app, which automates leak detection to improve accuracy, speed and safety. The company estimates that methane leaks cost the U.S. energy industry billions of dollars each year, with 60 percent of leaks going undetected. Additionally, methane leaks account for around 10 percent of natural gas's contribution to climate change, according to MIT’s climate portal.

Throughout the months-long ASCEND program, Aquanta Vision moved from the final stages of testing into full commercial deployment of NETxTEN. The app can instantly identify leaks via its physics-based algorithms and raw video output of optical gas imaging cameras. It does not require companies to purchase new hardware, requires no human intervention and is universally compatible with all optical gas imaging (OGI) cameras. During over 12,000 test runs, 100 percent of leaks were detected by NETxTEN’s system, according to the company.

The app is geared toward end-users in the oil and gas industry who use OGI cameras to perform regular leak detection inspections and emissions monitoring. Aquanta Vision is in the process of acquiring new clients for the app and plans to scale commercialization between now and 2028, Babur Ozden, the company’s founder and CEO, tells Energy Capital.

“In the next 16 months, (our goal is to) gain a number of key customers as major accounts and OEM partners as distribution channels, establish benefits and stickiness of our product and generate growing, recurring revenues for ourselves and our partners,” he says.

The company also received an investment for an undisclosed amount from Marathon Petroleum Corp. late last year. The funding complemented follow-on investments from Ecosphere Ventures and Odyssey Energy Advisors.

Ozden says the funds will go toward the extension of its runway through the end of 2026. It will also help Aquanta Vision grow its team.

Ozden and Marcus Martinez, a product systems engineer, founded Aquanta Vision in 2023 and have been running it as a two-person operation. The company brought on four interns last year, but is looking to add more staff.

Ozden says the company also plans to raise a seed round in 2027 “to catapult us to a rapid growth phase in 2028-29.”

HETI discusses Houston’s energy leadership, from pathways to progress

The View From HETI

In 2024, RMI in collaboration with Mission Possible Partnership (MPP) and the Houston Energy Transition Initiative (HETI) mapped out ambitious scenarios for the region’s decarbonization journey. The report showed that with the right investments and technologies, Houston could achieve meaningful emissions reductions while continuing to power the world. That analysis painted a picture of what could be possible by 2030 and 2050.

Today, the latest HETI progress report shows Houston is not just planning anymore — the region is delivering.

Real results, right now

The numbers tell a compelling story. Since 2017, HETI’s member companies have invested more than $95 billion in low-carbon infrastructure, technologies, and R&D. That’s not a commitment for the future—that’s capital deployed, projects built, and operations transformed.

The results showed industry-wide reductions of 20% in total Scope 1 greenhouse gas emissions and a remarkable 55% decrease in methane emissions from global operations. These aren’t projections—they’re actual reductions happening across refineries, chemical plants, and production facilities throughout the Houston region.

How Houston is leading

What makes Houston’s approach work is its practical, technology-driven focus. Companies across the energy value chain are implementing solutions that work today:

  • Electrifying operations and integrating renewable power
  • Deploying advanced methane detection and elimination technologies
  • Upgrading equipment for greater efficiency
  • Capturing and storing carbon at commercial scale
  • Developing breakthrough technologies from geothermal to advanced nuclear

Take ExxonMobil’s Permian Basin electrification, Shell and Chevron’s lower-carbon Whale project, or BP’s massive Tangguh carbon capture project in Indonesia. These aren’t pilot programs—they’re multi-billion dollar investments demonstrating that decarbonization and energy production go hand in hand.

From scenarios to strategy

The RMI analysis identified three key pathways forward: enabling operational decarbonization, accelerating low-carbon technology scale-up, and creating carbon accounting mechanisms. Houston’s energy leaders have embraced all three.

The momentum is undeniable. Companies are setting ambitious 2030 and 2050 targets with clear roadmaps. New projects are reaching final investment decisions. Innovation ecosystems are flourishing. And critically, this progress is creating jobs and driving economic growth across the region.

Why this matters

Houston isn’t just managing the energy transition—it’s proving what’s possible when you combine world-class engineering expertise, integrated infrastructure, access to capital, and a commitment to both energy security and emissions reduction.

The dual challenge of delivering more energy with less emissions isn’t theoretical in Houston—it’s operational reality. Every ton of CO₂ reduced, every efficiency gain achieved, and every technology deployed demonstrates that we can meet growing global energy demand while making measurable progress on climate goals.

The path forward

The journey from last year’s scenarios to this year’s results shows something crucial: when industry, policymakers, and communities align around practical solutions, transformation accelerates.

Houston’s energy leadership isn’t about choosing between reliable energy and environmental progress, it’s about delivering both. And based on the progress we’re seeing, the momentum is only building.

———

Read the full analysis here. This article originally appeared on the Greater Houston Partnership's Houston Energy Transition Initiative blog. HETI exists to support Houston's future as an energy leader. For more information about the Houston Energy Transition Initiative, EnergyCapitalHTX's presenting sponsor, visit htxenergytransition.org.

TotalEnergies to supply solar power to new Google data centers in Texas

power deal

French energy company TotalEnergies, whose U.S. headquarters are in Houston, has signed power purchase agreements to supply 1 gigawatt of solar power for Google data centers in Texas over a 15-year span.

The power will be generated by TotalEnergies’ two solar farms that are being developed in Texas. Construction on the company’s Wichita site (805 megawatt-peak, or MWp) and Mustang Creek site (195 MWp) is scheduled to start in the second quarter of this year.

Marc-Antoine Pignon, U.S. vice president for renewables at TotalEnergies, said in a press release that the 1-gigawatt deal “highlights TotalEnergies’ strategy to deliver tailored renewable energy solutions that support the decarbonization goals of digital players, particularly data centers.”

The deal comes after California-based Clearway, in which TotalEnergies holds a 50 percent stake, secured an agreement to supply 1.2 gigawatts of solar power to Google data centers in Texas and other states.

“Supporting a strong, stable, affordable grid is a top priority as we expand our infrastructure,” said Will Conkling, director of clean energy and power at Google. “Our agreement with TotalEnergies adds necessary new generation to the local system, boosting the amount of affordable and reliable power supply available to serve the entire region.”

TotalEnergies maintains a 10-gigawatt-capacity portfolio of onshore solar, wind and battery storage assets in the U.S., including 5 gigawatts in the territory served by the Electric Reliability Council of Texas (ERCOT).

Other clean energy customers of TotalEnergies include Airbus, Air Liquide, Amazon, LyondellBasell, Merck and Microsoft.

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