BYD, a Chinese automaker, has surpassed American electric vehicle (EV) manufacturer Tesla in global battery-electric vehicle (BEV) sales for the full year of 2025. This marks the first time BYD has achieved the top position in annual BEV unit sales. The development occurred amidst a complex market landscape characterized by increased competition, strategic pricing, and evolving consumer preferences in major automotive markets worldwide.
Global Electric Vehicle Sales Overview
BYD reported 2,254,714 all-electric vehicles sold in 2025, representing a 27.9% increase compared to its 2024 figures. In contrast, Tesla delivered 1,636,129 vehicles globally during the same period, indicating an 8.6% decline from its 2024 sales of approximately 1.79 million units. BYD's BEV sales for the year exceeded Tesla's by over 600,000 units.
BYD's Performance and Market Expansion
BYD's total vehicle sales across all categories, including both battery-electric vehicles and plug-in hybrids (PHEVs), reached 4,550,036 units in 2025. Of this total, BEVs constituted 49.6%, while PHEVs accounted for 50.4% with 2,288,709 units sold. While BEV sales increased, PHEV sales saw a 7.9% decrease compared to 2024.
The company's overall sales growth rate in 2025 was its slowest in five years, reflecting intensified competition within its primary market, China. Despite this domestic pressure, BYD's international sales reached a record 1,046,083 units, marking the first time the brand exported over one million vehicles and a 150% increase from the prior year. This expansion included growth in regions such as Latin America, Southeast Asia, and parts of Europe. As of October 2025, the UK was identified as BYD's largest market outside China, reporting an 880% increase in sales through September, driven by models like the Seal U plug-in hybrid SUV.
BYD's achievement occurred despite its EVs not being available for purchase in the United States. The company's pricing strategy in international markets has led to increased scrutiny and the imposition of new tariffs in some regions. BYD also reported profit declines during the second and third quarters of 2025. BYD founder and CEO Wang Chuanfu attributed the domestic sales slowdown to an erosion of the company's technological lead and insufficient product differentiation, indicating plans for new technology introductions.
Tesla's Market Dynamics and Strategic Responses
Tesla experienced a second consecutive year of declining sales in 2025. In the fourth quarter of 2025, Tesla's sales totaled approximately 418,000 units, a 15.6% decrease from the previous year. This followed a decline from record global sales reported in the third quarter, which saw increased purchases by American consumers prior to the expiration of a $7,500 tax credit on October 1.
The company's performance has been influenced by increased competition from other EV manufacturers globally, as well as market reception to its product offerings. In October, Tesla introduced lower-priced versions of its Model 3 and Model Y vehicles in the U.S. to stimulate sales, offering reduced range and features compared to premium counterparts. Tesla primarily reports global sales figures, with the U.S. market contributing nearly half of its revenue.
Factors cited as influencing Tesla's performance include increased competition and discussions surrounding CEO Elon Musk's involvement in the U.S. government, which some reports stated affected potential buyers in American and European markets. Musk's diverse business portfolio includes the social media platform X, the rocket firm SpaceX, and The Boring Company. Some investors have raised concerns regarding his focus on Tesla due to these multiple commitments, though Musk has indicated plans to reduce his role in government activities.
Elon Musk's compensation package, approved by shareholders in November, is linked to significant increases in Tesla's sales and stock market valuation over the next decade. This agreement includes targets such as the sale of one million humanoid robots within ten years. Tesla has invested in its "Optimus" robot product and "Robotaxis" self-driving technology, though the robotaxi service rollout has been limited to Austin, Texas, and San Francisco.
Broader Market Context
China is projected to become the world's leading car manufacturing nation in 2025, surpassing Japan for the first time. The Chinese automotive market remains highly competitive with approximately 150 car brands and over 50 EV manufacturers. BYD's market share in China decreased from a peak of 35% in 2023 to 29% in the first 11 months of 2025. During the same period, sales for competitors like Geely, China's second-largest EV producer, increased by nearly 90%. Other notable Chinese brands include Leapmotor and newcomer Xiaomi.
Chinese automotive brands have faced challenges including the imposition of automotive tariffs in European and United States markets, increased domestic price competition, and stricter regulatory oversight within China regarding practices such as 'zero mileage' cars.
On Friday, shares of Tesla (TSLA) rose by 1.2% in early trading, concluding 2025 with an 18.6% annual increase.