Chinese automotive powerhouse BYD has officially dethroned Tesla to become the world’s leading seller of electric vehicles on a calendar-year basis.
The 2025 performance data signals a watershed moment for the transition to clean energy, marking the first time the Shenzhen-based giant has outpaced its American rival in annual sales, a feat achieved despite BYD’s lack of a retail presence in the United States.
BYD, which stands for “Build Your Dreams,” reported on Thursday that its EV sales surged nearly 28% in 2025, reaching 2.26 million units. In contrast, Tesla announced on Friday its second consecutive year of declining sales, with deliveries falling 8.6% to approximately 1.6 million vehicles in the most significant annual drop in the company’s history.
The milestone follows years of rapid expansion for BYD, a company Tesla CEO Elon Musk famously dismissed during a 2011 Bloomberg interview. When asked about BYD as a potential competitor at the time, Musk laughed and stated, “I don’t think they have a great product,” adding that the company’s focus should be on “making sure they don’t die in China”.
Fourteen years later, BYD has achieved global dominance despite its vehicles not being available for retail purchase in the United States. While Tesla relies on the U.S. for nearly half of its revenue, BYD has successfully leveraged its stronghold in China – the world’s largest automobile market—while rapidly expanding its footprint across Europe and Latin America.
Market Pressures and Geopolitical Headwinds
For a decade, Tesla maintained an unchallenged monopoly on high-volume electric vehicle production, sustaining a remarkable 50% annual growth rate, which is now down to 9% as global competition intensifies.
Tesla’s decline in 2025 was exacerbated by several factors, including the elimination of the $7,500 federal tax credit in the United States at the end of September. Following the credit’s expiration, Tesla’s fourth-quarter sales plummeted 16% as demand softened.
The American automaker also faced intensifying competition from legacy global brands and a reputational fallout linked to Musk’s political activities. Earlier in 2025, when Musk was co-leading the Department of Government Efficiency, Tesla showrooms in the U.S. and Europe saw regular protests and reports of vandalism.
In China, BYD navigated a different set of challenges, including fierce domestic price wars and a crowded market of approximately 150 car brands and more than 50 EV makers. While BYD’s domestic market share dipped from 35% in 2023 to 29% by late 2025, its aggressive international strategy helped maintain its upward trajectory, according to China Passenger Car Association.
BYD’s overseas sales exceeded 1.04 million in 2025, including passenger cars and pickup trucks, covering over 110 countries and regions, making it one of the fastest-growing Chinese automakers in terms of exports.
From EVs to Robotics
As traditional EV sales growth slows, both companies are signaling shifts in their long-term strategic focus. Elon Musk has increasingly emphasized Tesla’s future in artificial intelligence and robotics, predicting that 80% of the company’s value will eventually stem from “Optimus,” a fleet of humanoid robots.
Investors have largely supported this transition. Despite slumping car sales, Tesla’s stock rose approximately 11% in 2025, as shareholders focused on Musk’s promises for robotaxis and automated systems.
Similarly, BYD CEO Wang Chuanfu attributed the company’s domestic slowdown to a temporary erosion of technological differentiation and has pledged to unveil new breakthrough technologies shortly to maintain the brand’s competitive edge.
“BYD has, on one hand, consolidated its price competitiveness through scale production, and on the other, boosted its global sales through targeted sales strategies,” according to Zhou Fatao, secretary general of the Guangdong New Energy Vehicles Industry Association.
The shift in leadership between Tesla and BYD underscores a broader cooling in U.S. electric vehicle demand, raising concerns among policy experts about the pace of the global transition toward sustainable transport. While 2026 is expected to be another challenging year for the EV market, analysts suggest a potential rebound by 2027 as manufacturers work to introduce more affordable models to the general public
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