According to the company’s announcement on Friday, Tesla’s sales decreased in 2025, giving Chinese automaker BYD the title of largest electric vehicle manufacturer in the world for the year.
In the last three months of the year, Elon Musk’s American company recorded 418,227 deliveries, bringing its total yearly sales to over 1.64 million EVs.
In comparison to 2024, this represented a decrease in sales of over 8%.
BYD announced a day earlier that had sold 2.26 million EVs in the previous year.
Analysts had expected Tesla’s sales in the final quarter to slow less, to 449,000, according to a FactSet consensus.
The pullback comes amid the elimination of a $7,500 US tax credit at the end of September 2025, with industry watchers noting it will take time for EV demand to rebalance.
But even before then, Tesla had seen sales struggle in key markets over CEO Musk’s political support of US President Donald Trump and other far-right politicians.
Tesla has also been grappling with rising competition from BYD and other Chinese companies, and from European giants.
Shenzhen-based BYD, which also produces hybrid cars, unveiled record EV sales in the past year on Thursday.
Known as “Biyadi” in Chinese — or by the English slogan “Build Your Dreams” — BYD was founded in 1995 and originally specialized in battery manufacturing.
The automotive juggernaut has come to dominate China’s highly competitive market for new energy vehicles, a term used to describe various vehicles from fully electric ones to plug-in hybrids. China is the world’s largest market for new energy vehicles.
Due to China’s more cost-conscious buying habits, BYD is now seeking to increase its global footprint.
The company’s success is increasing in Southeast Asia, the Middle East, and Europe, even though BYD and other Chinese EV manufacturers face significant tariffs in the US.
In terms of yearly EV sales, Tesla barely defeated BYD in 2024, with the US company’s 1.79 million exceeding the latter’s 1.76 million.
On Friday, Tesla’s stock closed 2.6% down in New York.
Analysts at Wedbush Securities noted that Tesla’s quarterly sales figure remained better than some had speculated.
They flagged that the company faces a “more difficult demand environment following the end of the EV tax credit while Europe remains a headwind to its deliveries.”
The company still sees challenges obtaining certain regulatory approval in Europe — relating to self-driving technology — with sales potentially rebounding once the regulatory hurdles are cleared.
“Sales around smaller and emerging markets have started to see larger growth metrics than expectations which look to offset the declines in key regions like China and Europe,” Wedbush analysts said.
