For the first time, China’s BYD has surpassed its American rival in yearly sales to become the world’s largest seller of electric vehicles (EVs), surpassing Elon Musk’s Tesla. The automaker reported on Friday that Tesla car sales fell by almost 9% in 2025 to 1.64 million vehicles sold worldwide, marking the second year in a row that car deliveries have decreased.
These numbers put Tesla behind BYD, which said on Thursday that sales of its battery-powered vehicles increased by about 28% to over 2.25 million last year. The US company has had a difficult year due to conflicting reactions to new products, concerns about Musk’s political involvement, and growing competition from Chinese competitors.
Sales of Tesla vehicles decreased by 16% in the final three months of 2025. A government incentive that had helped lower the cost of some battery-electric, plug-in hybrid, or fuel-cell vehicles by up to $7,500 (£5,570) was eliminated, contributing to the decrease.
Recently, Wall Street analysts reduced their 2026 sales projections for Tesla, signalling a more pessimistic outlook. By pricing their cars lower than well-known brands, Chinese companies like Geely, MG, and BYD which is currently the largest electric car company in the nation have put pressure on their Western competitors.
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