Tesla CEO Elon Musk once laughed at the idea of Chinese automaker BYD becoming a serious rival to Tesla. However, the situation completely turned in 2025. The Shenzhen-based company has now overtaken Tesla to become the world’s largest seller of battery electric vehicles (BEVs).

BUD has reported sales of 2.25 million BEVs in 2025, a 28% jump from the previous year. Tesla, by contrast, sold 1.64 million units, an 8.5% decline. This is the first time since 2018 that Tesla has lost its crown as the top BEV seller.

The rise of BYD

The rise of BYD has been fuelled by its diverse product lineup which ranges from $200,000 supercars to the $7,800 Seagull hatchback. Along with this, the technological innovation including five‑minute EV charging and free autonomous driving features also played an important role in the growth of the company.

Also, the strong international expansion with its plans to open 1,000 new stores in Europe after outselling Tesla there for the first time in May 2025.The company, once backed by Warren Buffett, also shipped 4.6 million vehicles in 2024 when plug‑in hybrids were included — a segment Tesla does not compete in.

Struggles faced by Tesla

The downturn of Tesla comes amid a turbulent year. The Q4 sales of the company fell by 16% year‑over‑year after the U.S. removed a $7,500 EV tax credit in September, triggering an industry‑wide slump. Also, the sales of the company collapsed in Europe amid backlash over Musk’s political views. Additionally, in China, Tesla faced intense competition from a wave of affordable, high‑tech EVs led by BYD.

Challenges ahead

Despite its success, BYD has faced headwinds:

• Fierce competition from local rivals such as Geely.
• A government crackdown on EV discounting.
• A 10% drop in December sales and a 20% fall in stock price over the past six months.

Still, BYD’s global ambitions and expanding footprint suggest it is well‑positioned to maintain momentum.