The global electric vehicle (EV) market has witnessed a major shift. Chinese EV giant BYD has overtaken Tesla to become the world’s largest electric car seller. This change comes at a time when Tesla’s annual sales in the US have fallen by around 9 percent, marking the second consecutive year of decline for the company.
Experts believe multiple factors are responsible for Tesla’s slowdown. These include the end of tax incentives on EV purchases in the US and the political activities of Tesla CEO Elon Musk, which have reportedly impacted consumer sentiment.
BYD pulls far ahead in sales
Tesla is projecting global EV sales of around 1.6 million units in 2025. In contrast, BYD has recorded a massive 28 percent jump in EV sales, reaching 2.64 million electric vehicles. Nearly half of BYD’s total product portfolio now consists of fully electric models. Overall, BYD’s global vehicle sales are expected to rise by 7.7 percent to nearly 4.6 million units by the end of 2025, firmly cementing its leadership position.
Chinese EV dominance grows
For many years, Tesla dominated the EV space in terms of both technology and sales. However, as the global EV market expanded rapidly, competition intensified—especially from Chinese manufacturers. Companies like BYD have benefitted from strong domestic demand, aggressive pricing, and rapid innovation, which has started to hurt the market share of Western automakers.
Tesla’s recent troubles
Tesla’s fourth-quarter performance was hit hard after the $7,500 EV subsidy in the US was phased out during the administration of Donald Trump. The company sold 418,227 vehicles globally in that quarter, missing analysts’ expectations. More than 90 percent of these sales came from just two models—the Model 3 and Model Y—highlighting Tesla’s limited product diversity.
In addition, Elon Musk’s close association with US politics and his controversial leadership of the Department of Government Efficiency (DOGE) drew widespread criticism. Environmental groups and eco-conscious consumers expressed dissatisfaction, leading to protests against Tesla in several places. In May 2025, Musk stepped down from his government role, a move widely seen as an effort to calm investors and repair the company’s image.
BYD’s future strategy
Meanwhile, BYD is preparing to further strengthen its dominance. The company plans to launch multiple facelifts and next-generation electric models in the near future. However, competition within China itself is intensifying, with rivals such as Geely, SAIC, and Xiaomi expanding aggressively in the EV space.
