China’s carmaker BYD overtook Tesla in 2025 to become the world’s largest manufacturer of battery electric vehicles, after the US company reported a sharp fall in deliveries towards the end of the year.
BYD sold 2.26 million battery electric cars during the year, well ahead of the 1.63 million deliveries reported by Tesla for the same period.
The shift marks a symbolic moment in the rise of China’s automotive industry, which has used the global transition to electric vehicles to expand rapidly. Chinese exports have increased in recent years, led by BYD and rivals including the state-owned SAIC and Chery, which owns the Omoda and Jaecoo brands.
Global electric car sales have continued to grow over the past two years, though at a slower pace than previously forecast. Carmakers have responded by cutting prices aggressively, while governments in several countries have softened or delayed targets for moving away from petrol-powered vehicles.
Tesla’s weaker performance has been linked in part to the withdrawal of electric vehicle subsidies under Donald Trump. The US president has also removed emissions regulations designed to encourage EV production. Tesla has additionally faced consumer backlash following Elon Musk’s public support for far-right political positions in late 2024.
The company delivered 418,200 vehicles in the final quarter of the year, falling short of analysts’ expectations. Total deliveries in 2025 were down 9% compared with 2024, marking a second consecutive annual decline.
Analysts surveyed by Bloomberg had expected Tesla to deliver about 441,000 vehicles in the quarter. In an unusual move, the company published its own consensus estimate before the end of the year, signalling that sales would be lower than market forecasts.
Tesla’s shares fell 1% on Friday and were down 8% since Christmas Eve.
Trump’s stance on electric vehicles contrasted with Musk’s support for his successful 2024 election campaign, to which the billionaire was the largest individual donor. Although Musk initially appeared to gain influence on EV policy, including a photo opportunity with Trump and a Tesla outside the White House, the relationship deteriorated sharply over the summer.
Despite falling sales, Tesla remains the world’s most valuable carmaker, with a market capitalisation of about $1.4tn, exceeding that of the next 30 manufacturers combined. Investors continue to back Musk’s ambitions to position Tesla as a leader in robotics and artificial intelligence.
Musk has argued that autonomous driving technology will set Tesla apart from its competitors. The company has launched a limited robotaxi service in Austin, Texas, though it faces growing competition. Several Chinese carmakers and technology firms now offer comparable systems, including BYD’s “God’s Eye” software, which is fitted even to its lowest-priced models.
BYD’s battery electric vehicle sales rose by 28% over the year, despite weaker sales in December.
Founded in 1995 as a battery manufacturer by Wang Chuanfu, BYD has grown into one of China’s largest industrial groups. Wang is often compared to Musk. When hybrid vehicles are included, BYD had already been producing more cars overall than Tesla.
Although BYD has surpassed Tesla in individual quarters before, its lead in battery electric vehicles widened across 2025, even as competition intensified within China’s crowded market.
The company sold 4.55 million vehicles in total during the year. Sales of plug-in hybrids fell 8% to 2.29 million, despite growing demand in some markets from drivers concerned about access to charging infrastructure. BYD also more than doubled sales of commercial vehicles, including electric buses and lorries, to 57,000.
