China's BYD becomes world’s top electric vehicle seller surpassing Tesla
China’s BYD has overtaken Tesla to become the world’s largest seller of electric vehicles, marking the first time the Chinese carmaker has outperformed its American rival in annual sales.
Tesla reported on Friday that it sold 1.64 million vehicles globally in 2025, a decline of nearly 9% from the previous year and its second straight annual drop in deliveries. The figures place Tesla behind BYD, which announced a day earlier that its battery-electric vehicle sales surged by almost 28% last year to more than 2.25 million units.
The downturn reflects a challenging year for Tesla, shaped by a lukewarm response to new models, growing unease among some consumers and investors over Elon Musk’s political involvement, and intensifying competition from lower-priced Chinese rivals. Tesla’s sales fell sharply toward the end of the year, dropping 16% in the final quarter of 2025.
Part of that decline followed the repeal of a US government subsidy that had reduced the cost of certain electric and plug-in hybrid vehicles by up to $7,500, weakening demand. In response to softer sales, Tesla launched lower-priced versions of its two best-selling models in the US in October in an effort to regain momentum.
Chinese manufacturers, including BYD, Geely and MG, have steadily gained ground by offering electric vehicles at prices below those of many established Western brands.
Despite losing its top spot in sales volume, Tesla has remained more profitable than BYD in recent quarters. Still, investors are closely watching how Musk steers the company through the next phase of its growth.
Under a pay deal approved by shareholders in November, Musk stands to receive a record-breaking compensation package that could be worth up to $1 trillion over the next decade, provided Tesla meets ambitious targets for sales growth and market value. The agreement also requires Tesla to sell one million humanoid robots over the next ten years, tied to heavy investment in its “Optimus” robot and self-driving “robotaxi” technology.
Analysts say Tesla’s planned rollout of self-driving services and robotaxis in 2026 will be critical to its future performance. While questions remain over the feasibility and regulation of full autonomy, some remain bullish.
Meanwhile, BYD’s rapid rise has not been without challenges. Its sales growth slowed in 2025 to the weakest pace in five years, partly due to fierce competition within China. Yet the Shenzhen-based company continues to expand aggressively overseas, particularly in Latin America, Southeast Asia and Europe, even as several countries impose steep tariffs on Chinese electric vehicles.
In October, BYD said the UK had become its largest market outside China, with sales in Britain jumping 880% in the year to the end of September. The surge was driven largely by strong demand for the plug-in hybrid version of its Seal U sports utility vehicle.
This story is written and edited by the Global South World team, you can contact us here.
