As 2025 came to a close, Tesla Inc. demonstrated a mixed operational performance characterized by robust production figures alongside weakening delivery metrics, particularly in the European arena. While the company achieved unprecedented energy storage deployments, vehicle deliveries exhibited a significant year-on-year decline in the fourth quarter, reflecting intensifying market headwinds.
Fourth Quarter Production and Delivery Figures
During the final quarter of 2025, Tesla manufactured a total of 434,358 vehicles, modestly below the previous year’s output of 459,445 units for the same period, marking a 5.5% decrease. Deliveries in this quarter stood at 418,227 units, reflecting a 16% reduction relative to the 495,570 vehicles delivered in Q4 2024. These delivery figures also fell short of the Visible Alpha consensus estimate, which anticipated 434,487 units.
The bulk of production and deliveries stemmed from Tesla's Model 3 and Model Y lines, with 422,652 units produced and 406,585 delivered in the quarter. Approximately 3% of these deliveries were tied to operating lease accounting. Additional vehicle models contributed 11,706 units produced and 11,642 units delivered, with about 5% under lease accounting.
Energy Storage Deployments Break Records
In contrast to the automotive segment's challenges, Tesla’s energy storage business attained a new milestone with deployments reaching 14.2 gigawatt-hours in Q4 alone. Annually, the company achieved 46.7 gigawatt-hours of energy storage deployments, underscoring substantial growth and diversification beyond vehicle manufacturing.
Annual Production and Delivery Overview
For the full year, Tesla produced 1.65 million vehicles and delivered roughly 1.64 million, narrowly missing the Visible Alpha delivery forecast of 1.65 million vehicles. This equates to an 8.6% decline in deliveries when compared to the 1.79 million vehicles delivered during 2024.
The Model 3 and Model Y remained the cornerstone of Tesla’s output, with production amounting to 1,600,767 units and deliveries reaching 1,585,279 units over the year. Other vehicle models added 50,850 deliveries to the total volume.
Challenges Persist in European Markets
Despite the global operational scale, Tesla continues to face significant obstacles within European markets. December registrations experienced marked declines across key countries, extending a broader sales slowdown that began in late 2024 amidst heightening market competition.
Specifically, France saw new registrations plummet by 66% in December and decrease by 37% over the entire year. Sweden reported an even larger drop, with December registrations down 71% and annual sales falling 70%. Declines were also registered in Portugal (-22%) and Spain (-4%) over the full year.
By November, Tesla’s market share across Europe, including the U.K. and European Free Trade Association countries, had decreased to 1.7% from 2.4% the prior year, despite electric vehicles collectively capturing 19% of the car market in these regions. This diminished share occurred despite Tesla introducing lower-priced versions of the Model Y and Model 3 targeting affordability.
Conversely, Norway represented a notable exception to the broader European trend. Tesla’s December registrations surged by 89% to 5,679 vehicles, elevating the company’s market share to above 19% and setting a new sales record in a country where electric vehicles dominate new car sales.
Chinese Automakers Accelerate Presence in Europe
The pressures Tesla faces in Europe coincide with aggressive expansion by Chinese automakers. In November, domestic Chinese brands reached a record 12.8% share of the European electric vehicle market, propelled by companies including BYD Co. Ltd., Stellantis-backed Leapmotor, and Chery.
BYD exhibited impressive sales growth of nearly 222% year over year in Europe during November, outperforming Tesla’s contracting sales figures. Furthermore, Chinese hybrid vehicles attained a market share exceeding 13% across the EU, EFTA countries, and the U.K. Vehicle exports from China to Europe increased substantially by 63% year over year, with total vehicle exports jumping more than 87%.
Upcoming Earnings and Market Outlook
Tesla is scheduled to announce its fourth-quarter 2025 earnings after the market closes on January 28, 2026. Analysts currently expect revenue of approximately $24.87 billion and earnings per share around 45 cents.
The company’s shares have appreciated by over 19% in the past year. However, Wall Street remains divided in its assessments, with some firms adopting a cautious stance on valuation, while others emphasize Tesla’s long-term prospects rooted in developments relating to autonomy, artificial intelligence, and robotaxis rather than immediate vehicle sales growth.
At the time of reporting, Tesla shares traded moderately higher at $453.40, up 0.82% on the day.