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China’s BYD has overtaken Tesla to become the world’s largest seller of electric vehicles, marking a major shift in the global EV market for the first time.
Tesla reported a nearly nine per cent decline in vehicle sales in 2025, delivering around 1.64 million cars worldwide. This was the American company’s second consecutive year of falling deliveries, placing it behind BYD in annual EV sales.
BYD, meanwhile, announced that its battery electric vehicle sales rose by almost 28 per cent last year, reaching more than 2.25 million units. The strong performance has cemented the Shenzhen-based manufacturer’s position as a dominant force in the global electric vehicle industry.
Tesla faced several challenges throughout the year, including a mixed response to new models, growing unease among investors over Elon Musk’s political involvement, and intense competition from Chinese manufacturers. Sales fell sharply in the final quarter of 2025, partly due to the removal of a government subsidy that had reduced the price of certain electric and hybrid vehicles by up to $7,500.
Analysts have since revised down Tesla’s sales forecasts for 2026, reflecting concerns over slowing demand. Chinese automakers such as BYD, Geely and MG have continued to pressure Western rivals by offering more affordable vehicles, forcing Tesla to introduce lower-priced versions of its top-selling models in the US.
Despite declining sales, Tesla has remained more profitable than BYD in recent quarters. Much of its future growth is expected to hinge on its self-driving technology, robotaxi rollout and humanoid robot project, Optimus, which form part of Musk’s long-term strategy.
BYD’s rise, however, has not been without challenges. Its sales growth slowed in 2025 to the weakest pace in five years, largely due to fierce competition within China. Nevertheless, the company continues to expand rapidly overseas, particularly in Latin America, Southeast Asia and Europe, despite tariffs imposed on Chinese EVs in several markets.
In October, BYD announced that the UK had become its largest market outside China, with sales surging sharply due to strong demand for its plug-in hybrid models.
While Tesla remains a key innovator in the EV space, BYD’s rapid growth and competitive pricing underline a significant reshaping of the global electric vehicle landscape.
