Tesla loses EV crown to China’s BYD – Financial Times
Tesla lost its crown as the world’s biggest electric-car maker in 2025 to China’s BYD after suffering its second consecutive year of declining vehicle sales.
Elon Musk’s group delivered 1.64mn fully electric vehicles last year, a 9 per cent fall from the 1.79mn it shipped in 2024, it said on Friday, in the wake of fierce competition and the cancellation of US tax credits for EV purchases.
BYD this week said it had it sold 2.26mn pure EVs in 2025, up 28 per cent from a year earlier following expansion in Europe and other overseas markets.
The Chinese group had previously outsold Tesla on a quarterly basis but has now overtaken its US competitor for annual deliveries of fully electric models.
“BYD has cemented its place globally,” said Tu Le, founder of consultancy Sino Auto Insights, adding that Chinese innovation in the mass market for EVs was making it hard for Tesla and others to compete.
“BYD, along with the rest of Chinese EV Inc, has raised the stakes so high that it’s made it very difficult to design a vehicle that would be able to take significant share from them,” he added.
While Tesla increased its sales every year between 2011 and 2023, Friday’s figures represent its second consecutive annual drop.
The company has been under heavy pressure following the ending of US tax credits, a consumer backlash over Musk’s political activities and the public falling out between the world’s richest man and US President Donald Trump.
Tesla on Friday said it had delivered 418,227 vehicles in the final quarter of 2025, down 16 per cent from the same period a year earlier and below market expectations for 423,000 vehicles.
While the group’s traditional automotive business has declined, Musk has made a strategic pivot towards autonomous driving, artificial intelligence and robotics.
“Tesla doesn’t even seem to want to compete [on pure EVs],” said Le. “If they did, they’d be on the cusp of launching new models.”
The company took the unusual step this week of releasing analysts’ forecasts for annual deliveries before the official announcement in what appeared to be an attempt to manage market expectations.
It has tried to rejuvenate sales with a refreshed edition of its Model Y as well as a cheaper, stripped-down version. But the recovery has not been as strong as the company had hoped in the face of an influx of more affordable EVs from Chinese and western rivals.
“Europe remains a continuous headwind for Tesla, with the company still having difficulty obtaining regulatory approval for its full self-driving (FSD) tech,” Wedbush analyst Dan Ives said in a note.
He predicted the technology would receive European regulatory clearance in the first half of 2026.
While Tesla has struggled to recover its sales in Europe, BYD has rapidly increased its market share across the continent with new, more affordable EVs.
The Chinese group will also begin producing locally at a new plant in Hungary as it deals with pressure at home because of Beijing’s crackdown on aggressive price competition.
Tesla’s global deliveries reached record levels in the third quarter when US consumers rushed to buy electric cars ahead of the expiry of EV tax credits at the end of September.
But automotive executives have predicted a sharp decline in EV sales in the US as carmakers increase their line-up of hybrids and other petrol models because of Trump’s policy changes.
Analysts expect Tesla to deliver 1.75mn vehicles this year — below 2024 levels — according to forecasts published by the carmaker.
The group’s shares had hit an all-time closing high of $489.88 in mid-December on the back of investor hopes for its self-driving robotaxi business.
The shares ended 2025 at just under $450 and closed down 2.95 per cent at $438.07 on Friday in New York, giving Tesla a market capitalisation of about $1.37tn.
