In 2011, Tesla CEO Elon Musk dismissed Chinese electrical automobile maker BYD as a competitor. But some 14 years later, BYD beat the American EV pioneer at its personal sport.
The Chinese automobile big has overtaken Tesla because the world’s largest vendor of EVs, in keeping with 2025 information launched by the 2 rivals this week.
BYD announced Thursday that it had bought 2.26 million EVs, up almost 28% from 2024. Meanwhile, Tesla reported Friday a second straight yr of declining gross sales: Deliveries fell 8.6% to only one.6 million, recording the largest annual drop within the firm’s historical past.
BYD was capable of overtake Tesla regardless that its EVs are not out there for buy in America, whereas China is Tesla’s second-largest market.
In the fourth quarter, Tesla’s gross sales got here in at about 418,000, down 15.6% from a yr earlier and a fair sharper decline from record global sales within the third quarter, when American motorists had been dashing to purchase EVs earlier than a $7,500 tax credit score expired on October 1.
Unlike different automakers, Tesla does not report its gross sales by market, offering solely world figures, however the US market is accountable for almost half its income, in keeping with firm stories. Reports by different automakers Monday are additionally prone to present weak US EV gross sales within the ultimate three months of 2025.
Tesla’s deliveries had grown almost 50% a yr at one level. But it reported its first drop in annual sales in 2024, posting a modest 1% decline. Its gross sales fell sharply within the first six months of 2025 because it confronted extra competitors from the EV choices of different automakers, such a BYD and legacy world automakers, in addition to backlash in opposition to Musk’s political actions, which angered many potential American and European consumers.
Early within the yr, when Musk was main the Trump administration’s Department of Government Efficiency, there have been regular protests outdoors Tesla showrooms in Europe and the United States, and a few reports of vandalism in opposition to Tesla automobiles and websites.
The rush to make the most of the soon-to-expire tax credit score helped gross sales within the third quarter. But it probably introduced ahead purchases by some consumers who may need purchased Teslas later within the yr.
To attempt to counter the lack of the tax credit score, Tesla rolled out cheaper versions of its Model 3 and Model Y automobiles, however these variations, whereas costing about $5,000 lower than their “premium” equivalents, additionally gained’t journey as far on a full cost because the premium variations and lack some options.
BYD achieved the most recent milestone whereas grappling with fierce competitors and relentless worth wars in its residence market. The intense squeeze in China has prompted the Shenzhen-based firm to develop additional abroad, although its low-price technique has drawn scrutiny and led to new tariffs in some markets.
Growth in BYD’s total gross sales, together with EVs and hybrids, slowed to its weakest tempo in 5 years, with greater than 4.6 million autos bought final yr – underscoring the corporate’s struggles in China, the world’s largest car market and the place BYD sells the majority of its automobiles.
BYD additionally reported revenue declines for each the second and third quarters of 2025.
While China’s auto market has change into much less crowded previously few years, competitors stays stiff with round 150 automobile manufacturers and greater than 50 EV makers, in keeping with HSBC’s analysis. Rivals like Geely, China’s second-largest EV maker, fast-rising competitor Leapmotor and latecomer Xiaomi, which debuted its first EV solely in 2024, have regularly eroded BYD’s home market share.
From a peak of 35% in 2023, BYD’s market share fell to 29% within the first 11 months of 2025, in keeping with China Passenger Car Association. In the identical interval final yr, its gross sales declined greater than 5%, whereas Geely’s surged almost 90%.
Wang Chuanfu, BYD’s founder and CEO, attributed the slowdown in home gross sales to erosion of BYD’s technological lead and inadequate product differentiation at a December investor assembly, in keeping with state-run media. But he added that the corporate would quickly unveil new applied sciences.
Shares of Tesla (TSLA) rose 1.2% in early buying and selling Friday. Shares closed 2025 up 18.6% for the yr, as traders regarded previous weak gross sales and centered on Musk’s plans for a fleet of robotaxis and an “army” of humanoid robots that he has promised to begin constructing quickly. But up to now the rollout of Tesla’s robotaxi service has fallen nicely in need of his guarantees, restricted to 2 metropolitan areas, Austin, Texas, and San Francisco, quite than serving half of the US inhabitants as he had predicted it might by the yr’s finish.