China’s electric vehicle manufacturer BYD has overtaken Tesla to become the world’s largest seller of electric vehicles, marking a significant shift in the global EV market. The change in leadership comes after Tesla reported a decline in vehicle deliveries for the second consecutive year, amid rising competition and policy-related demand challenges.
In 2025, BYD sold approximately 2.26 million electric vehicles, registering a growth of nearly 28 per cent compared to the previous year. In contrast, Tesla’s global deliveries declined by over 8 per cent, falling to around 1.64 million vehicles. While overall global EV sales continued to grow, Tesla’s performance lagged behind several major competitors.
Market analysts attribute Tesla’s slowdown to multiple factors, including the expiry of key electric vehicle tax incentives in the United States, which had previously supported consumer demand. The reduction in incentives coincided with intensified competition from automakers in China and Europe, many of whom expanded their EV portfolios and adopted aggressive pricing strategies.
Tesla’s fourth-quarter deliveries stood at 418,227 vehicles, lower than the corresponding period a year earlier and below market expectations. During the year, the company introduced more affordable versions of its Model 3 and Model Y in an effort to stimulate demand, particularly in international markets.
BYD’s growth was supported by strong domestic sales in China and rapid expansion in overseas markets, especially in Europe. The company reported record international sales, strengthening its global position and widening the gap with competitors.
The shift in market leadership highlights the changing dynamics of the global electric vehicle industry, with Chinese manufacturers gaining ground through vertically integrated supply chains, cost efficiencies, and scale advantages. As competition intensifies, automakers are increasingly adjusting pricing, technology strategies, and market focus to sustain growth in a rapidly evolving EV landscape.
