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BYD sold 4.6 million vehicles in 2025, surpassing Tesla to lead global EV sales
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China's EV market faces challenges as government incentives for purchases are reduced
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BYD's domestic sales slowed due to increased competition and diminished tech lead
BYD Co. met its full-year sales target and likely surpassed Tesla Inc. to become the world’s largest electric-vehicle maker in 2025 — a milestone overshadowed by a challenging outlook for the Chinese auto market in the year ahead.
The carmaker delivered 4.6 million vehicles last year, up 7.7% from 2024, according to a statement. That’s in line with the full-year goal the company lowered in September.
BYD and its rivals face growing pressure in the coming year as China scales back some incentives supporting EV purchases. An influx of new models is also making domestic competition even fiercer, while trade barriers pose challenges for BYD’s ambitions to expand overseas.
China’s best-selling carmaker has faced stiffer competition in the past year from Geely Automobile Holdings Ltd. and Xiaomi Corp., whose new models and rapid innovations are winning over consumers.
BYD’s Chief Executive Officer Wang Chuanfu said at an investor meeting in early December that the technological head start the company maintained the past few years had diminished and affected domestic sales. He hinted at new technology breakthroughs to come, with the company’s 120,000-strong engineering team giving him confidence about its ability to regain advantages, Chinese media reported.
A bright spot for BYD has been surging overseas sales. Deliveries outside of China hit 1.05 million in 2025.
The company has set a goal to expand overseas sales to between 1.5 million to 1.6 million units in 2026, according to a Citigroup Inc. report in November that cited a meeting with BYD management.
Pressure is mounting on BYD after it posted back-to-back declines in quarterly profit and found itself at the center of China’s efforts to rein in aggressive discounting. The growing scrutiny is likely to accelerate consolidation and shake up the hierarchy of the sector.
So far, market watchers believe that BYD can weather the challenges better than others. The company’s total sales could grow to 5.3 million units next year, according to analyst estimates compiled by Bloomberg. Analysts at Deutsche Bank expect new product launches and the unveiling of a technology platform to boost the company’s competitiveness.
That could enable BYD to stretch its lead over Tesla, which is struggling with challenges of its own.
The US carmaker saw sales plunge in the early part of 2025 as it retooled production lines at each of its assembly plants for the redesigned Model Y. Chief Executive Officer Elon Musk’s polarizing role in the Trump administration also put off some consumers, and the US ending federal purchase subsidies for EVs is expected to drag on demand going forward.
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