BYD surpasses Tesla in 2025 with 2.26 million electric vehicles sold, compared to 1.64 million for the American manufacturer, confirming a historic shift in global leadership.
Tesla records a second consecutive year of decline, penalized by the end of incentives, increased competition, and a focus on AI rather than volume.
Tesla is no longer the world’s leading electric vehicle manufacturer. In 2025, Elon Musk’s group was overtaken by the Chinese BYD, now establishing itself as the global leader in sales of 100% electric vehicles. A symbolic but more importantly, structural shift in a market increasingly dominated by the Chinese industry.
Second consecutive year of decline for Tesla
Tesla delivered 1.64 million electric vehicles in 2025, down by 9% compared to 2024. This marks the second consecutive year of declining sales, a first in the modern history of the manufacturer, after over a decade of almost uninterrupted growth between 2011 and 2023.
In the fourth quarter, Tesla only delivered 418,227 vehicles, a 16% drop year-over-year, falling short of market expectations. Despite a temporary peak in the third quarter, boosted by anticipation of the end of American tax credits, the overall momentum remains negative.
BYD emerges as the new global leader
BYD delivered 2.26 million 100% electric vehicles in 2025, up by 28% from the previous year. The Chinese group, already dominant in their domestic market, has accelerated its expansion into Europe and other regions, enabling it to surpass Tesla on an annual basis, after having done so on certain quarters.
The strength of BYD lies in a clear positioning: a wide range, more affordable models, and massive industrial capacity. For many analysts, the rise of BYD illustrates the maturity of China’s electric ecosystem, now capable of setting the global pace.
Competitive pressure and political headwinds
Tesla faces a combination of unfavorable factors for 2026. The end of tax credits for the purchase of electric vehicles in the United States could impact demand. Additionally, political backlash over Elon Musk’s statements and public tensions with Donald Trump have contributed to tarnishing the brand’s image with some consumers in 2025.
In Europe, the situation remains challenging. Tesla struggles to obtain regulatory approvals for full deployment of its advanced autonomous driving system, limiting its technological edge against aggressively priced competitors.
An assumed strategic shift, but risky
Facing intensified competition, Elon Musk has clearly redirected Tesla’s strategic narrative. The company now focuses on artificial intelligence, robotics, and autonomous driving, relegating the mass market for electric vehicles to the background.
This decision has sparked criticism. Some observers believe that Tesla has ceased to truly compete on the volume and model renewal fronts. Updates to the Model Y and the introduction of more stripped-down versions have not been enough to halt the loss of momentum compared to an increasingly dense and competitive alternative offer.
Tesla’s TSLA stock drops by 2.5% in a day and over 10% in a week.
A strong signal for the global industry
The loss of global leadership by Tesla marks a turning point. It confirms that the electric battle is no longer just about software innovation or brand prestige, but about the ability to produce massively, affordably, and across multiple continents.
While Tesla remains valued primarily as a technology company, BYD emerges as the industrial champion of electric vehicles. In 2026, the question is not whether China dominates the EV market, but how far this dominance can extend.
