Chinese automaker BYD has dethroned Tesla as the world’s top seller of electric vehicles, capping a tough year for the U.S. company marked by slumping deliveries and intensifying competition.
BYD reported on Thursday that it sold 2.26 million EVs in 2025, a nearly 28% jump from the previous year.
Tesla, meanwhile, said Friday its global deliveries dropped 8.6% to 1.6 million vehicles — the steepest annual decline in its history and the second consecutive year of falling sales, CNN reported.
The shift comes 14 years after Tesla CEO Elon Musk brushed off BYD as a rival. BYD achieved the milestone without selling in the U.S., even as China remains Tesla’s second-largest market.
Tesla’s fourth-quarter deliveries totaled about 418,000, down 15.6% from a year ago and sharply below the prior quarter’s record, when U.S. buyers rushed to claim a $7,500 tax credit before it expired on October 1. The incentive’s end likely pushed some purchases forward, contributing to the late-year dip.
The U.S. accounts for nearly half of Tesla’s revenue, though the company provides only global figures. Other automakers’ reports due Monday are expected to reflect soft U.S. EV demand in the final months.
Once boasting nearly 50% annual growth, Tesla saw its first annual drop in 2024, with a 1% decline. Sales tumbled in early 2025 amid stiffer competition from BYD, legacy players, and newcomers like Geely, Leapmotor, and Xiaomi, plus backlash over Musk’s political involvement, which sparked protests at showrooms in the U.S. and Europe and reports of vandalism.
In response to the tax credit loss, Tesla introduced cut-rate versions of its Model 3 and Model Y in October, priced about $5,000 lower but with reduced range and fewer features.
BYD, facing cutthroat price wars at home, expanded abroad despite tariffs in some markets. Its total vehicle sales, including hybrids, hit over 4.6 million — the slowest growth in five years — amid a crowded Chinese field with around 150 brands and more than 50 EV makers.
BYD’s China EV market share slipped to 29% in the first 11 months from 35% in 2023, per the China Passenger Car Association. Geely’s sales soared nearly 90% in that span.
At a December investor meeting, BYD founder and CEO Wang Chuanfu blamed the domestic slowdown on waning technological edges and poor product differentiation, per state media, but said new tech was coming.
Tesla shares climbed 1.2% in early Friday trading and ended 2025 up 18.6%, buoyed by investor bets on Musk’s robotaxi fleet and humanoid robots despite weak sales. The robotaxi service, however, launched far short of its promises, confined to Austin, Texas, and San Francisco, rather than covering half the U.S. population.
Musk, the world’s richest person, must ramp up sales and valuation to unlock a potential $1 trillion pay package approved in November, which includes selling a million Optimus robots over a decade.
Analysts like Dan Ives of Wedbush Securities remain bullish, predicting Tesla will claim about 70% of the self-driving market in the next decade, “as no other company in the world can match the scale and scope” of the firm, the BBC reported.
Wall Street has trimmed 2026 sales forecasts for Tesla amid the gloom. Musk’s commitments to X, SpaceX, the Boring Company, and a brief stint leading the Trump administration’s Department of Government Efficiency raised concerns about divided focus. However, he has since stepped away from the government role.
