China’s fast-growing automaker BYD is on course to officially surpass Tesla as the world’s largest electric vehicle (EV) company by annual sales, as both manufacturers prepare to release their final figures for 2025.
Based on sales recorded so far this year, the US-based company led by Elon Musk is unlikely to retain its long-held top position. By the end of November, Shenzhen-headquartered BYD — which also manufactures hybrid vehicles — had sold 2.07 million electric vehicles in 2025.
Tesla, meanwhile, reported sales of 1.22 million vehicles by the end of September. While its third-quarter figures were bolstered by a one-off surge to nearly 500,000 units ahead of the expiry of a US$7,500 tax credit for EV buyers, sales momentum is expected to slow significantly in the final quarter.
Analysts surveyed by FactSet estimate Tesla will deliver about 449,000 vehicles in the fourth quarter, bringing its total 2025 sales to around 1.65 million — a year-on-year decline of 7.7 per cent and well below BYD’s year-to-date total by late November.
Deutsche Bank projects an even weaker fourth quarter for Tesla, forecasting about 405,000 deliveries. The bank expects sales to fall by roughly one-third in North America and Europe, and by about 10 per cent in China, reflecting intensifying competition and shifting market dynamics.
Industry observers say the US EV market is still adjusting to the removal of federal tax incentives, which expired in September under legislation backed by President Donald Trump. Even before the policy change, Tesla had struggled in key markets amid growing competition from BYD, other Chinese automakers, and European manufacturers, as well as controversy surrounding Musk’s political positions.
“We believe Tesla will see some weakness on deliveries” in the fourth quarter, said Wedbush Securities analyst Dan Ives. He added that deliveries of around 420,000 vehicles would signal stable demand, noting that investors are increasingly focused on Tesla’s autonomous driving ambitions from 2026 onward.
Despite its rapid growth, BYD faces challenges at home, where price-sensitive consumers have squeezed profit margins. To offset this, the company has accelerated its overseas expansion, building production capacity and supply chains beyond China.
“BYD is among the pioneers in establishing overseas manufacturing and supply networks for EVs,” said Jing Yang, Asia-Pacific corporate ratings director at Fitch Ratings, adding that geographical diversification could help the company navigate an increasingly complex global tariff landscape.
Concerns over Chinese state subsidies have prompted trade barriers abroad. While the US has imposed tariffs of up to 100 per cent on Chinese EV imports, Europe has taken a more measured approach, even as BYD presses ahead with plans to manufacture vehicles in Hungary.
Although Tesla’s prospects of reclaiming the global EV sales crown remain uncertain, analysts say the company could find new growth drivers in autonomous technology. TD Cowen’s Itay Michaeli said advances in Tesla’s full self-driving systems could reignite consumer demand.
Musk has said Tesla’s autonomous Cybercab robotaxi is slated to enter production in April 2026, while the launch of lower-priced versions of the Model 3 and Model Y could also help lift future sales.
