'Biggest year in Tesla history': Why 2025 is a make-or-break year for Tesla as the Model 3, Model Y face competition from a wave of Chinese rivals such as the BYD Sealion 7 and Xpeng G6 | Opinion
When Tesla CEO Elon Musk called 2025 the “biggest year in Tesla history” at a recent investors meeting, he was right, although not for the reason of becoming the world’s most valuable company, as he might think.
Despite what the stock market might suggest, Tesla is not on the unstoppable trajectory that it would seem.
With much of its huge gains in valuation over the past 12 months coinciding with President Trump's election and the presumptions of investors that Tesla will receive preferential treatment, the seriousness of the situation appears to be eluded by Musk.
Full-year net income was down sharply at the company's investor meeting last week, 23 per cent on 2023's numbers and 40 per cent on its record year in 2022, to be exact. So too were global deliveries, with 2024 becoming Tesla’s first year on record of annual decline.
Tesla's January 2025 sales fell by 33.2 per cent in Australia compared to the previous year, following a 16.85 per cent decline overall in 2024, with its best-selling Model Y already facing far more competition in the electric SUV segment than it had this time last year.
Chinese EV brands, most of which were unknown outside of China until a couple of years ago – such as BYD, Nio and Xiaomi – are now emerging fiercely on the global market, while Musk’s polarising behaviour is turning many current and prospective owners off the brand.
So, when he claims, “Teslas will be in the wild, with no one in them, in June, in Austin” in regard to rolling out its full self-driving (FSD) technology, he ought to mean it, because you can’t help feeling that investor patience is starting to wear thin.
For that reason, 2025 cannot be another year of empty promises and timelines from Musk, who’s history of doing so is long and tiresome.
Almost 10 years ago in 2015, Musk told investors on Tesla's FSD plans, “My guess for when we will have full autonomy is approximately three years.”
Then, six years later, at another Q4 investors meeting in January 2022, he said, ”My personal guess is that we'll achieve full self-driving this year.”
2025 Tesla Model Y
If Musk and the Tesla team do in fact stage a successful public launch of an unsupervised FSD scheme this year, the response will undoubtedly be immense. After all, it is still the world’s largest and most successful electric car brand.
Having a mainstream FSD service would only reinforce that notion even further. Waymo is the only other company to do so thus far, though they don’t build cars, they build software.
Placating any immediate skepticism from investors in Musk’s plans was confirmation that “affordable” Tesla models are still coming in the first half of the year, along with the autonomous Cybercab model in 2026.
In all likelihood, though, committing to affordable models wasn’t the decision of Musk himself, who didn’t lend a single word to the topic during the recent investors conference after labelling them as “pointless” last November.
2025 Tesla Model 3 Performance (Image: Tom White)
Rather, it looks to be a strategic move made in response to Chinese EV firm BYD, which has moved this year to slash prices across its model range and add new cheaper entry grades to some of its most popular models globally.
In Australia, new Essential grades of its electric Atto 3 SUV and Dolphin small car have brought down prices by $4500 and $6900, respectively, making them two of the cheapest EVs in the country in their respective segments.
Tesla looks all but certain to do the same with its Model 3 and Model Y after confirming its upcoming models would use aspects of the current and next-generation platforms, with production taking place on current assembly lines in the US, Europe and China.
2026 Tesla Cybercab
Whether that suggests Tesla is running out of ideas and that the situation is more precarious than previously assumed is anything but clear.
But one thing is for certain: Tesla’s future will depend enormously on the success of the next 12 months.
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