Tesla loses top EV seller title to China's BYD as 2025 sales decline

Tesla’s global electric vehicle sales fell in 2025, allowing China’s BYD to overtake the US automaker as the world’s largest EV manufacturer, company figures showed on Friday.

The Elon Musk-led company delivered 418,227 vehicles in the final quarter of the year, bringing total deliveries for 2025 to about 1.64 million units. That represented a drop of more than eight percent compared with 2024.

BYD announced a day earlier that it sold 2.26 million electric vehicles last year, comfortably surpassing Tesla’s total.

Analysts had expected Tesla’s fourth-quarter deliveries to come in at around 449,000, according to a FactSet consensus, making the slowdown sharper than forecast.

The decline comes after the expiration of a $7,500 US tax credit for electric vehicles at the end of September 2025, a move analysts say has disrupted demand and will take time to rebalance. Tesla had also been facing weaker sales in key markets even before the incentive ended, partly linked to CEO Elon Musk’s political support for US President Donald Trump and other far-right figures.

At the same time, competition has intensified from BYD and other Chinese manufacturers, as well as from established European automakers.

Shenzhen-based BYD, which also produces hybrid vehicles, reported record EV sales in 2025. Founded in 1995 as a battery manufacturer, the company has grown into a dominant force in China’s highly competitive market for so-called new energy vehicles, which include fully electric and plug-in hybrid models.

China is the world’s largest market for new energy vehicles, and BYD is now seeking to expand overseas as slowing domestic demand pressures profit margins. While Chinese EV makers face steep tariffs in the United States, BYD has been gaining traction in Southeast Asia, the Middle East and Europe.

Tesla had narrowly retained the global EV sales lead in 2024, selling 1.79 million vehicles compared with BYD’s 1.76 million.

Tesla shares fell 2.6 percent in New York on Friday.

Analysts at Wedbush Securities said Tesla’s quarterly results were stronger than some fears but warned that the company faces a tougher demand environment following the end of the US tax credit, while Europe continues to weigh on deliveries.

They also noted ongoing regulatory hurdles in Europe related to self-driving technology, suggesting sales could rebound once approvals are secured. At the same time, stronger growth in smaller and emerging markets could help offset declines in major regions such as China and Europe.