China’s BYD has overtaken Elon Musk-led Tesla to become the world’s largest seller of electric vehicles, ending the American company’s long-held lead in global EV sales.
BYD said on Thursday that sales of its battery-powered cars climbed by nearly 28% in 2025 to more than 2.25 million vehicles, driven largely by strong demand in overseas markets and competitive pricing.
Tesla, meanwhile, reported on Friday that its global deliveries fell by almost 9% last year to 1.64 million vehicles, marking a second consecutive annual decline.
The drop followed a difficult year for the US automaker, which grappled with slowing demand, rising competition from Chinese brands and the removal of a government subsidy that had reduced the cost of some electric vehicles by as much as $7,500 (£5,570).
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Sales weakened further toward the end of the year, with Tesla recording a 16% fall in deliveries in the final quarter of 2025. Analysts have since trimmed their expectations for the company’s 2026 performance.
Chinese manufacturers such as BYD, Geely and MG have increasingly challenged Western carmakers by offering lower-priced models across Europe and other key markets.
Tesla responded in October by rolling out cheaper versions of its best-selling vehicles in the United States, as it seeks to revive growth.
Despite the sales setback, analysts say Tesla’s long-term prospects will hinge on its self-driving technology and planned robotaxi launch. Dan Ives of Wedbush Securities said Tesla could still dominate the sector, arguing it may control about 70% of the self-driving market over the next decade because “no other company in the world can match the scale and scope” of its operations.
While BYD has surged ahead in sales volume, its growth slowed in 2025 to the weakest pace in five years amid fierce competition in China. Tesla has also remained more profitable than its Chinese rival in recent quarters.
Still, BYD’s rapid expansion outside China continues. The Shenzhen-based automaker said in October that the UK had become its largest overseas market, with sales in Britain jumping 880% year-on-year, fuelled by demand for the plug-in hybrid version of its Seal U SUV.