In 2025, BYD Co. surpassed Tesla Inc. to become the world’s largest manufacturer of electric vehicles after meeting its full-year sales target. This significant accomplishment was tempered by a dire forecast for China’s car sector in the next year.
BYD Sales Performance
According to Bloomberg, the Hong Kong-listed shares of the Chinese electric vehicle manufacturer increased by as much as 2.3% on the first trading day of the new year.
Last year, the Shenzhen-based automaker shipped 4.6 million cars, a 7.7% increase from 2024. That is consistent with the company’s decreased full-year target from September. It sold almost as many purely electric cars as plug-in hybrids within the mix.
Tesla’s Comparison
According to figures collated by Bloomberg, Tesla is anticipated to disclose on Friday that it delivered around 440,900 cars in the fourth quarter, a decrease of 11% from the same period last year. This would result in yearly sales of around 1.6 million, the second annual decline in a row.
Challenges in the Coming Year
In the next year, BYD and its competitors will be under increasing pressure as China reduces some of the incentives that encourage EV purchasing. Trade hurdles provide obstacles to BYD’s aspirations to grow internationally, while an infusion of new models is making domestic rivalry even more intense.
Geely Automobile Holdings Ltd. and Xiaomi Corp., whose new models and quick developments are winning over customers, have posed a greater threat to China’s best-selling automaker in the last year. Last year, BYD’s stock grew by 7%, but as stronger competition and heightened regulatory scrutiny became more apparent, the company lost the gains from an early surge that saw its shares rise as high as 74% by late May.
⚡ BYD Overtakes Tesla in EV Sales 2025
- BYD Sales: 4.6 million vehicles, +7.7% YoY, surpassing Tesla
- Vehicle Mix: Nearly equal split between pure EVs & plug-in hybrids
- Tesla Comparison: 1.6 million units sold, Q4 down 11% YoY
- Stock Performance: BYD shares rose 2.3% on Jan 1, 2026
🌍 Challenges & Global Growth
- Domestic Challenges: Reduced EV incentives & stronger local competition (Geely, Xiaomi)
- Tech Pressure: BYD CEO admits technological edge has eroded; 120,000-person R&D staff to reclaim advantage
- International Sales: 1.05 million overseas units in 2025; target 1.5–1.6 million in 2026
- Analyst Outlook: Sales projected at 5.3 million in 2026; new products & tech platform expected to boost competitiveness
- Tesla Concerns: Production redesign, reduced US EV incentives & controversial CEO impacting demand
Technological Concerns
At an investor conference in early December, Wang Chuanfu, the CEO of BYD, said that the company’s technical advantage over the previous several years had deteriorated and had an impact on domestic sales. According to Chinese media, he alluded to upcoming technological advancements and expressed confidence in the company’s capacity to reclaim advantages thanks to its 120,000-person technical staff.
International Sales
Increasing sales abroad has been BYD’s bright point. In order to counteract the company’s downturn in its primary market, deliveries outside of China reached 1.05 million in 2025, surpassing the high-end target of 1 million sales. For the eighth straight month, its passenger EV and hybrid sales decreased, falling 37.7% in December.
In a note, Morgan Stanley said that it anticipates a more significant domestic recovery after BYD’s big line-up changes in early 2026.
International Expansion Targets
According to a Citigroup Inc. article from November that referenced a meeting with BYD management, the business has set a target to increase international sales to 1.5 million to 1.6 million units by 2026.
Market Pressure and Analyst Outlook
BYD is under increasing pressure after reporting consecutive drops in quarterly earnings and becoming the focus of China’s attempts to curb excessive pricing. The increasing scrutiny is probably going to hasten consolidation and upend the sector’s structure.
Analysts are thus far optimistic that BYD would be able to handle the difficulties better than others. According to expert projections gathered by Bloomberg, the company’s overall sales might reach 5.3 million units next year. To increase the company’s competitiveness, Deutsche Bank analysts anticipate the introduction of new products and a technological platform. This might give BYD a greater edge against Tesla, which is having its own problems.
Tesla’s Challenges
Early in 2025, the US carmaker saw a significant decline in sales as it redesigned production lines across its plants in anticipation of the revised Model Y. Some customers were discouraged by CEO Elon Musk’s contentious role in the Trump administration, and future demand is anticipated to be impacted by the termination of US government EV purchase incentives.
