Tesla’s 2025 EV sales fell over 8% to 1.64 million, ceding the top spot to China’s BYD which sold a record 2.26 million electric vehicles.
WASHINGTON: Tesla has ceded its position as the world’s biggest electric vehicle maker to Chinese rival BYD after reporting a sales decline for 2025.
The American company reported 418,227 deliveries in the final quarter, bringing its full-year total to around 1.64 million EVs.
This marked a drop of more than 8% compared to its 2024 sales figures.
A day earlier, BYD announced it sold 2.26 million EVs last year, setting a new record.
Analysts had expected a softer slowdown for Tesla, with a consensus forecast of 449,000 deliveries for the fourth quarter.
The sales pullback followed the elimination of a USD 7,500 US tax credit at the end of September 2025.
Industry watchers note it will take time for EV demand to rebalance after the incentive ended.
Tesla’s sales had already been struggling in key markets prior to the credit change.
This was partly attributed to CEO Elon Musk’s political support for US President Donald Trump and other far-right politicians.
The company also faces rising competition from BYD, other Chinese firms, and European automotive giants.
Founded in 1995 as a battery maker, BYD now dominates China’s new energy vehicle market.
The term “new energy vehicles” encompasses fully electric cars and plug-in hybrids.
BYD is aggressively expanding overseas as domestic consumption patterns in China pressure profitability.
The Chinese automaker is finding success in Southeast Asia, the Middle East, and Europe.
It faces hefty tariffs in the United States market.
Tesla only narrowly beat BYD in 2024, with 1.79 million sales against BYD’s 1.76 million.
Tesla shares closed 2.6% down in New York following the sales report.
Analysts at Wedbush Securities noted the quarterly figure was better than some feared.
They flagged a “more difficult demand environment following the end of the EV tax credit while Europe remains a headwind.”
The company still faces regulatory hurdles in Europe related to self-driving technology approval.
Sales could rebound once these regulatory obstacles are cleared.
“Sales around smaller and emerging markets have started to see larger growth metrics than expectations which look to offset the declines
