After years as the leader of the battery electric vehicle market, Tesla has now been overtaken by China’s BYD. In 2025, the Shenzhen automaker sold 2.25 million BEVs, 28 percent more than it did in 2024.
Meanwhile, the American car company delivered only 1.64 million vehicles, as sales fell by 8.5 percent in the same period.
However, the gap between the two giants didn’t close up overnight. Tesla had held the BEV sales crown since 2018, but BYD has steadily been moving up the ranks. The Chinese automaker had already surpassed Tesla in 2024 if the records of plug-in hybrids are included. It shipped a total of 4.6 million BEVs and plug-in hybrids worldwide. Tesla does not offer hybrid models.
Some recent factors might have compounded Tesla’s decline. In September 2025, the US removed the $7,500 federal EV tax credit, which led to a cooling in demand. The effect was immediate: 2025 Q4 sales dropped nearly 16 percent compared to 2024.
In Europe, sales further declined in what might be a reaction to CEO Elon Musk’s political positions. While Tesla grappled with these challenges, BYD sales remained intense.
The Asian competitor, once backed by Warren Buffett, thrived by offering a broad lineup. They catered to all budgets with their vehicles ranging from $200,000 electric supercars to the $7,800 Seagull hatchback.
Despite facing its own pressures, including a 10 percent sales drop in December and a 20 percent share price decline over six months, BYD is betting on global expansion. International sales surged in 2024, and the company planned to open 1,000 new European stores, where it outsold Tesla for the first time in May 2024.
Even Musk now acknowledges the shift, stating in 2023 that BYD’s vehicles are “highly competitive.” While Tesla had reclaimed the top spot from BYD in the past, the current gap will make another comeback more difficult.
