NEW YORK (AP) — Tesla lost its crown as the world’s bestselling electric vehicle maker on Friday 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 Musk who once dismissed BYD as a threat as Tesla's rise seemed unstoppable, crushing traditional automakers with far more resources and helping make him the world's richest man.
For the fourth quarter, sales totaled 418,227, falling short of the 440,000 that analysts polled by FactSet expected. The sales total was impacted by the expiration of a $7,500 tax credit that was phased out by the Trump administration at the end of September.
Tesla stock was up 0.5% at $451.60 in early trading 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 service 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.
Investors have largely shrugged off the falling numbers, choosing to focus on Musk's pivot to different parts of business.
He has been saying that plunging car sales don’t matter as much now because the future of the company lies more with his new driverless robotaxis service, the company’s energy storage business and building robots for the home and factory. To make his task worthwhile, 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.
This story has been corrected to show that BYD sold 2.26 million vehicles last year, not 2.26.
FILE - The Tesla logo is displayed at a Tesla dealership Thursday, Mar. 13, 2025, in Miami. (AP Photo/Lynne Sladky, File)
DEIR AL BALAH, Gaza Strip (AP) — A grandmother and her 5-year-old grandson burned to death in Gaza when their tent caught fire, as thousands of Palestinians battle harrowing winter conditions in flimsy makeshift housing and the humanitarian crisis persists.
The nylon tent in Yarmouk caught fire Thursday night from cooking, a neighbor said.
As 2026 begins, the shaky 12-week-old ceasefire between Israel and Hamas has largely ended large-scale Israeli bombardment of Gaza. But Palestinians are still being killed by Israeli fire, especially along the so-called Yellow Line that delineates areas under Israeli control, and the humanitarian crisis is compounded by frequent winter rains and colder temperatures.
On Friday, American actor and film producer Angelina Jolie visited the Rafah border crossing between Egypt and the Gaza Strip. The only crossing between the territory and a country other than Israel, it remains closed despite Palestinian requests to reopen it to people and aid.
Over past weeks, cold winter rains have repeatedly lashed the sprawling tent cities, causing flooding, turning Gaza’s dirt roads into mud and causing buildings damaged in Israeli bombardment to collapse. UNICEF says at least six children have now died of weather-related causes, including a 4-year-old who died in a building collapse.
At least three children have died of hypothermia, according to Gaza’s Health Ministry. High temperatures in December were in the 60s Fahrenheit (15-20 Celsius), but dipped into the mid-40s F (6-8 C) on some nights.
Aid groups say not enough shelter materials are getting into Gaza during the truce. Figures recently released by Israel’s military suggest it hasn’t met the ceasefire stipulation of allowing 600 trucks of aid into Gaza a day, though Israel disputes that finding. There is also concern that Israel's recent suspension of more than three dozen international aid groups from operating in Gaza will make it even harder to get supplies like tents in.
Palestinians have long called for mobile homes and caravans to be allowed in to protect them against living in impractical and worn out tents. In Yarmouk, people live in nylon tents near a garbage dump.
Ashraf al-Suwair said he woke up to the sound of screaming as his neighbors shouted “fire! fire!" He said nylon is like fuel, easy to ignite. “We need a good place that suits the people and the children of Gaza, instead of burning to death," he said.
Jolie met with members of the Red Crescent on the Egyptian side of the Rafah border crossing and then visited a hospital in the nearby city of Arish to speak with Palestinian patients on Friday, according to Egyptian officials.
Reopening the crossing, which would allow Palestinians to leave Gaza — especially the ill and wounded who could get specialized care unavailable in the territory — has been contentious. Israel has said that it will only allow Palestinians to exit Gaza, not enter, until militants in Gaza return all the hostages they took in the attack on Oct. 7, 2023, which triggered the war. The remains of one hostage are still in Gaza.
In addition, Israel says Palestinians wanting to leave Gaza will have to get Israeli and Egyptian security approval. Egypt, meanwhile, says it wants the crossing immediately opened in both directions, so Palestinians in Egypt can enter Gaza. That’s a position rooted in Egypt’s vehement opposition to Palestinian refugees permanently resettling in the country.
For more than two decades until 2022, Jolie was a special envoy to the U.N. refugee agency. She has continued to advocate for human rights issue and has visited conflict areas, including Ukraine.
On Friday the foreign ministers of Arab and Muslim countries, including Egypt, Qatar and Saudi Arabia, expressed concern about Gaza's humanitarian situation.
The situation has been “compounded by the continued lack of sufficient humanitarian access, acute shortages of essential life-saving supplies, and the slow pace of the entry of essential materials," said the joint statement.
Israel has said throughout the war that Hamas was siphoning off aid supplies, an accusation that the United Nations and aid groups have denied. Last month, the World Food Program said that there have been “notable improvements” in food security in Gaza since the ceasefire.
Since the ceasefire between Israel and Hamas began, 416 people have been killed and 1,142 wounded in Gaza, according to the Health Ministry. The overall Palestinian death toll from the war is at least 71,271. The ministry, which doesn't distinguish between militants and civilians in its count, is staffed by medical professionals and maintains detailed records viewed as generally reliable by the international community.
The Israel-Hamas war began with the Hamas-led Oct. 7 attack in southern Israel that killed about 1,200 people and saw 251 taken hostage.
Meanwhile, Israel continues operating in the occupied West Bank.
On Friday, the Palestinian Prisoners media office said that Israel carried out numerous raids across the territory, including the major cities of Ramallah and Hebron. Nearly 50 people were detained, following the arrest of at least 50 other Palestinians on Thursday, most of those in the Ramallah area.
Israel's military said there were arrests made of people “involved in terrorist activity." Last Friday, a Palestinian attacker rammed his car into a man and then stabbed a young woman in northern Israel on Friday afternoon, killing both, police said. Raids were conducted afterward in the attacker's West Bank hometown.
The Palestinian Prisoner’s Society says that Israel has arrested 7,000 Palestinians in the West Bank and Jerusalem this year, and 21,000 since the war began. The number arrested from Gaza isn't made public by Israel.
Find more of AP’s Israel-Hamas coverage at https://apnews.com/hub/israel-hamas-war
The bodies of Amal Abu Al-Khair and her grandchild, Saud, are transferred to Al-Shifa Hospital in Gaza City after they were killed when their tent caught fire overnight at the Yarmouk displacement camp, Friday, Jan. 2, 2026. (AP Photo/Jehad Alshrafi)
Fatima Abu al-Bayd inspects what remains of her mother's tent after her mother, Amal Abu Al-Khair, and grandchild, Saud, were killed when it caught fire overnight at the Yarmouk displacement camp in Gaza City, Friday, Jan. 2, 2026. (AP Photo/Jehad Alshrafi)
Fatima Abu al-Bayd inspects what remains of her mother's tent after her mother, Amal Abu Al-Khair, and grandchild, Saud, were killed when it caught fire overnight at the Yarmouk displacement camp in Gaza City, Friday, Jan. 2, 2026. (AP Photo/Jehad Alshrafi)
Magdi Abu Al-Khair bids farewell to his mother, Amal Abu Al-Khair, after she and her grandchild, Saud, were killed when their tent caught fire overnight at the Yarmouk displacement camp, at Al-Shifa Hospital in Gaza City, Friday, Jan. 2, 2026. (AP Photo/Jehad Alshrafi)
