China’s BYD is nearing a turning point for the automotive industry. The manufacturer is set to surpass Tesla as the world’s largest electric vehicle seller. The shift would mark the first annual sales victory over its American competitor.
BYD reported strong performance figures on Thursday. Sales of battery powered cars increased by nearly 28 percent last year. Global deliveries climbed above 2.25 million vehicles.
Tesla will publish its complete 2025 sales numbers later on Friday. Analyst estimates already indicate a clear shortfall. They suggest Tesla sold about 1.65 million vehicles during the year.
Tesla Faces Mounting Headwinds
Tesla encountered significant challenges across major markets. Consumers responded unevenly to recently introduced models. Public concern also grew over Elon Musk’s political involvement.
Competition from Chinese manufacturers intensified throughout the year. Carmakers such as Geely, MG and BYD expanded rapidly. They captured market share with lower priced electric vehicles.
BYD has taken the lead in China’s electric car market. Its models consistently undercut established global brands. This pricing strategy continues to pressure Western rivals.
Price Cuts and Executive Expectations
Tesla acted in October to address slowing demand. The company released cheaper versions of its two best selling US models. Management aimed to stimulate sales growth.
Elon Musk carries major expectations at Tesla. He must deliver substantial increases in sales and market value over the next decade. These goals directly link to his compensation package.
Shareholders approved the agreement in November. The deal could reward Musk with up to one trillion dollars. It would become the largest executive payout ever recorded.
Robots, Politics and Investor Anxiety
The compensation plan includes demanding operational targets. Musk must oversee the sale of one million humanoid robots within ten years. Tesla continues heavy investment in Optimus robots and autonomous Robotaxis.
Tesla sales dropped sharply during early 2025. The decline followed backlash over Musk’s role in President Donald Trump’s administration. Political controversy weighed on brand perception.
Musk also oversees several other major ventures. His business interests include X, SpaceX and the Boring Company. He also led the Department of Government Efficiency, known as Doge.
Some investors questioned his focus on Tesla. They argued his responsibilities became too extensive. Musk later pledged to significantly reduce his government involvement.
BYD Expands Globally Despite Slower Growth
BYD’s rapid ascent slowed slightly last year. Sales growth in 2025 weakened to the lowest level in five years. Fierce domestic competition in China played a key role.
Still, BYD remains a global electric vehicle powerhouse. Competitive pricing continues to attract buyers worldwide. That advantage supports ongoing international expansion.
The Shenzhen based company is expanding rapidly beyond China. Latin America, Southeast Asia and parts of Europe drive that growth. Many countries have imposed steep tariffs on Chinese electric cars.
In October, BYD said the UK became its largest market outside China. Sales in Britain surged by 880 percent year on year. Demand focused on the plug in hybrid Seal U SUV.
