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.

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.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

CERAWeek crowns winners of 2026 clean tech pitch competition

top teams

Twelve teams from around the country, including several from Houston, took home top honors at this year's Energy Venture Day and Pitch Competition at CERAWeek.

The fast-paced event, held March 25, put on by Rice Alliance, Houston Energy Transition Initiative and TEX-E, invited 36 industry startups and five Texas-based student teams focused on driving efficiency and advancements in the energy transition to present 3.5-minute pitches before investors and industry partners during CERAWeek's Agora program.

The competition is a qualifying event for the Startup World Cup, where teams compete for a $1 million investment prize.

PolyJoule won in the Track C competition and was named the overall winner of the pitch event. The Boston-based company will go on to compete in the Startup World Cup held this fall in San Francisco.

PolyJoule was spun out of MIT and is developing conductive polymer battery technology for energy storage.

Rice University's Resonant Thermal Systems won the second-place prize and $15,000 in the student track, known as TEX-E. The team's STREED solution converts high-salinity water into fresh water while recovering valuable minerals.

Teams from the University of Texas won first and second place in the TEX-E competition, bringing home $25,000 and $10,000, respectively. The student winners were:

Companies that pitched in the three industry tracts competed for non-monetary awards. Here are the companies named "most-promising" by the judges:

Track A | Industrial Efficiency & Decarbonization

Track B | Advanced Manufacturing, Materials, & Other Advanced Technologies

  • First: Licube, based in Houston
  • Second: ZettaJoule, based in Houston and Maryland
  • Third: Oleo

Track C | Innovations for Traditional Energy, Electricity, & the Grid

The teams at this year's Energy Venture Day have collectively raised $707 million in funding, according to Rice. They represent six countries and 12 states. See the full list of companies and investor groups that participated here.

TotalEnergies $1B payout shows evolution in Trump's anti-wind strategy

Shift in the Winds

The Trump administration’s $1 billion payout to TotalEnergies to walk away from U.S. offshore wind development is a novel tactic against the industry that supporters see as creative — but opponents see as foolish and extreme.

The Interior Department announced March 23 that TotalEnergies agreed to what is essentially a refund of its leases for projects off the coasts of North Carolina and New York, and will invest the money in a liquefied natural gas export terminal in Texas and other fossil fuel projects instead. The department hailed it as an “innovative agreement” with the French energy giant so that the "American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry.”

The tactical shift comes after federal courts have thwarted President Donald Trump's efforts to stop offshore wind through executive action.

U.S. Sen. Chuck Schumer, a New York Democrat, told The Associated Press that the payment “sets a dangerous precedent and is a shortsighted misuse of taxpayer dollars.”

Robin Shaffer, president of the anti-offshore wind group Protect Our Coast New Jersey, applauded what he called “out of the box” thinking. Shaffer said after losing in the courts, the administration needed a way to take back leases that never should have been issued because of the harm offshore wind development causes to the marine environment.

“The Trump administration has been relentlessly creative in its efforts to stop offshore wind development in the U.S.," he said.

While the Republican president has been particularly hostile to offshore wind, he has also blocked dozens of clean energy projects and canceled billions of dollars in grants to promote clean energy, which he derides as the “Green New Scam.” This comes at a time when the U.S. is trying to boost power supplies in an artificial intelligence race against China and keep electricity bills from rising even higher.

The Iran war has also dealt a massive energy shock to the global economy by choking off most exports of crude oil and liquefied natural gas through the Strait of Hormuz.

A vow to stop offshore wind

On the campaign trail, Trump vowed to end the offshore wind industry as soon as he returned to the White House. Trump said wind turbines are horrible and expensive and pose a threat to birds and other wildlife.

Connecticut is getting power from Revolution Wind, an offshore wind project, and estimates it will lower wholesale energy costs for the state. The National Audubon Society, which is dedicated to the conservation of birds, has said climate change is a greater threat to birds.

Trump has long opposed offshore wind energy. In 2015, he lost his yearslong battle to stop an offshore wind farm near Aberdeen in eastern Scotland when Britain’s Supreme Court unanimously ruled against him. Trump claimed the 11 turbines would spoil the view from his golf course.

He wants to boost production of oil, natural gas and coal, which cause climate change, because he argues that doing so would give the U.S. the lowest-cost energy and electricity of any nation in the world.

His first day back in office, he acted on his campaign promise, signing an executive order temporarily halting offshore wind lease sales in federal waters and pausing permitting for all wind projects.

The deal comes after the administration is thwarted by the courts

U.S. District Judge Patti Saris vacated Trump’s executive order blocking wind energy projects on Dec. 8, declaring it unlawful as she sided with state attorneys general from 17 states and Washington, D.C., who challenged the order. The administration is appealing.

Two weeks later, the administration ordered that construction stop on five major East Coast offshore wind projects, citing national security concerns. Developers and states sued, and federal judges allowed all five to resume construction, essentially concluding that the government didn't show that the national security risk was so imminent that construction must halt.

TotalEnergies wasn't one of those; it had already paused its two projects soon after Trump was elected. And the company has now pledged not to develop any new offshore wind projects in the United States. CEO Patrick Pouyanné said the refunded lease fees will finance the construction of a liquefied natural gas plant in Texas and the development of its oil and gas activities, calling it a “more efficient use of capital” in the U.S.

Kit Kennedy, who directs the power division at the Natural Resources Defense Council, said the proposed payment to TotalEnergies was a “boondoggle” that “transfers nearly $1 billion from American taxpayers to a foreign corporation and the oil and gas industry.”

Why is the U.S. using taxpayer dollars “to not develop power when we need energy?” she asked, calling the Trump administration deal a “scam” and harmful to the U.S. economy and environment.

Carl Tobias, a University of Richmond Law School professor who has been following the lawsuits, called it “unorthodox.”

Democrats criticize stopping offshore wind when energy prices are spiking

As crude oil and gasoline prices surge, Democrats in Virginia said the U.S. should be strengthening its energy independence and resilience. Virginia started receiving power on March 23 from an offshore wind project targeted by Trump.

“Giving an energy company $1 billion of taxpayer money to pack up its jobs and invest elsewhere — in the middle of an unpopular and unwise war that is spiking energy costs — is beyond idiotic,” U.S. Sen. Tim Kaine said in a statement to AP.

U.S. Rep. Chellie Pingree, a Maine Democrat, questioned whether the payout is legal under appropriations law and said she would question Interior Secretary Doug Burgum about it at the upcoming budget hearings.

Dozens of commercial leases issued by the Bureau of Ocean Energy Management remain active for wind energy development in the U.S.

Abigail Dillen, president of Earthjustice, said she wouldn't attempt to guess whether the Trump administration will pay to stop any others, but clearly it is willing to go to extreme measures.

“Will they do this again? Maybe,” she said.

Baker Hughes teams up with Google and XGS on energy tech

project partners

Houston-based energy technology company Baker Hughes recently forged two significant partnerships—one with tech titan Google and another with geothermal power startup XGS Energy.

Under the Google Cloud partnership, announced at CERAWeek 2026, Baker Hughes technology will be paired with Google Cloud AI and data analytics to improve the performance of AI data centers’ power systems and energy-transfer machinery. Furthermore, the two companies will explore opportunities for data centers to extract greater value from underused industrial and operational data.

“Infrastructure that powers the growing demand for AI and cloud computing is becoming one of the most critical drivers of global electricity needs,” Lorenzo Simonelli, chairman and CEO of Baker Hughes, said in the announcement.

“Through this partnership with Google Cloud, we are bringing together world-class power technologies and digital capabilities to help data center operators improve efficiency, enhance reliability, and accelerate progress toward lower-carbon operations,” he added.

Through the XGS partnership, Baker Hughes will provide engineering services for XGS’ 150-megawatt geothermal project in New Mexico. The project will supply energy to the Public Service Co. of New Mexico grid in support of New Mexico data centers operated by Meta Platforms, the parent company of Facebook and Instagram.

“With this single project for Meta in New Mexico, XGS will increase the state’s operating geothermal capacity by tenfold,” says Ghazal Izadi, chief operating officer at XGS.

“Geothermal energy plays a vital role in delivering reliable, cleaner power at scale,” added Maria Claudia Borras, chief growth and experience officer and interim executive vice president of industrial and energy technology at Baker Hughes. “By collaborating with XGS at this early stage, we are applying our ground‑to‑grid capabilities to reduce technical risk, accelerate reservoir validation, and engineer an integrated solution to deliver … power efficiently and reliably.”

California-headquartered XGS, which has a major presence in Houston, is known for its proprietary solid-state geothermal system that uses thermally conductive materials to deliver affordable energy wherever there is hot rock.