When idling, it's fine. It starts off at 1500 RPM or so and slowly drops down to ~900.
When driving though, I'll accelerate and the RPMs jump to 2500 and then suddenly drops to 1500 even though I haven't released the pedal and I can hear the engine hasn't shifted into a higher gear and the RPM sound is the same; definitely not 1000 RPM slower.

In fact, the RPMs always jumps to ~2500 RPM and then drops back down to 1500 RPM, even though I can clearly hear it running much faster.

Is there a sensor somewhere that needs replacing or maybe the tachometer itself has deteriorated in the instrument cluster panel?

 

I had a GMC truck that did that and it was the servo motors in the gauge itself that went bad. I hope someone on here can help you get it working again.