Growing Chinese auto giant BYD stands poised to officially surpass Tesla as the world’s biggest electric vehicle company in annual sales.
Both groups are expected to release their final figures for 2025 soon, and based on this year’s sales data, it’s virtually impossible for the American company led by Elon Musk to maintain its lead.
As of the end of November, BYD, based in Shenzhen and also producing hybrid vehicles, had sold 2.07 million electric vehicles so far in 2025.
Tesla, meanwhile, had sold 1.22 million by the end of September.
Tesla’s September figures included an extraordinary surge in sales, reaching almost half a million vehicles in a three-month period, before the expiration of a US tax credit for electric vehicle buyers, which ended thanks to legislation backed by US President Donald Trump, a climate change skeptic.
However, Tesla’s sales in the next quarter are expected to fall to 449,000 units, according to a consensus analysis by FactSet. This would give Tesla approximately 1.65 million sales for all of 2025, a 7.7% drop and well below the level BYD had reached by the end of November.
Deutsche Bank, which projects only 405,000 electric vehicle sales for Tesla during the fourth quarter, anticipates a reduction in the company’s sales of approximately one-third in both North America and Europe, and one-tenth in China.
Transition Period
Industry analysts say that demand for electric vehicles will take time to reach equilibrium in the United States after the elimination of the $7,500 US tax credit at the end of September 2025.
Even before that, Tesla had experienced sales difficulties in key markets due to its CEO Musk’s political support for Trump and other far-right politicians. Tesla has also faced increasing competition in the electric vehicle sector from BYD and other Chinese companies, as well as European giants.
“We believe Tesla will experience some weakness in deliveries” in the fourth quarter, said Dan Ives of Wedbush Securities.
Sales of 420,000 units would be “enough to show stable demand,” with Wall Street “focusing on the autonomous vehicle chapter, which will begin in 2026,” Ives added, referring to the company’s plans for autonomous vehicles.
Despite its rapid growth, BYD has faced challenges in its home market.
With profitability in China hampered by consumer concerns about prices, the company has sought to strengthen its presence in foreign markets.
BYD is “one of the pioneers in establishing production capacity and supply chains for electric vehicles overseas,” Jing Yang, head of Asia-Pacific Corporate Ratings at Fitch Ratings, told AFP.
“Looking ahead, its geographic diversification is likely to help it navigate an increasingly complex global tariff environment,” Yang said.
BYD’s foreign rivals have been reluctant to accept the Chinese state subsidies and other government aid that have allowed it to sell vehicles at low prices.
Trump’s predecessor, Joe Biden, imposed 100% tariffs on imports of Chinese electric vehicles, which could increase even further under Trump. Europe has also imposed tariffs on Chinese imports, but BYD is developing manufacturing capacity in Hungary.
While Tesla’s chances of regaining its global leadership in electric vehicles seem uncertain, the American company is also potentially positioned for growth.
TD Cowen’s Michaeli believes that autonomous technology is playing an increasingly important role for Tesla, with advancements in its “Full Self-Driving” or “FSD” offerings potentially boosting sales.
“As Tesla begins to roll out self-driving features and expand FSD capabilities, if they do so successfully, it will generate greater demand for their vehicles,” Michaeli said.
Musk has announced that the Cybercab, an autonomous robotaxi model, will begin production in April 2026. The company has also unveiled more affordable versions of the Model 3 and Y that could boost sales.