Chinese automaker BYD has officially surpassed Tesla to become the world's largest seller of all-electric vehicles in 2025, delivering 2,256,704 battery electric vehicles (BEVs) for the full year. This marks the first time BYD has claimed the top spot in a full calendar year, a title long held by Tesla. The company's total passenger vehicle sales, including plug-in hybrids, reached 4.54 million units in 2025, representing an 8% increase from 2024.
However, BYD's growth trajectory showed significant signs of deceleration. The company's full-year sales growth slowed sharply to 7.7% in 2025, down from 41% growth recorded in 2024. December deliveries were particularly weak, falling to 414,784 vehicles, down from 474,921 in November and marking an 18% year-over-year decline. This was the company's fourth consecutive month of declining monthly sales.
The slowdown underscores mounting pressure in China's fiercely competitive EV market, characterized by intense price wars and rapid product launches that have eroded margins. BYD's management, including Chairman and CEO Wang Chuanfu, acknowledged a deterioration in the company's technological advantage, which weighed on domestic sales. Wang stated that BYD would unveil major innovations in 2026 to reclaim its edge, leveraging its 120,000-strong technical workforce.
Overseas markets emerged as a critical bright spot for BYD. The company exported a record 132,837 vehicles in December, bringing its full-year 2025 exports to over 1 million units—a staggering 150% increase year-over-year. This international expansion is becoming increasingly vital to offset softer domestic conditions.
Meanwhile, Tesla is expected to report around 1.7 million deliveries for 2025, a slight decline from its 2024 total of 1,789,226 vehicles. Tesla's focus has shifted under CEO Elon Musk, who shelved plans for a $25,000 mass-market EV to prioritize artificial intelligence and robotaxi development.
The broader Chinese EV landscape showed mixed results. Startups like Leapmotor and Xpeng posted strong growth with affordable models, delivering 596,555 and 429,445 vehicles respectively in 2025. Nio recorded 326,028 deliveries, a 46.9% increase. In contrast, Li Auto saw deliveries decline sharply to 406,343 units. New entrants like Xiaomi and the Huawei-backed Harmony Intelligent Mobility Alliance also made significant inroads.
Looking ahead, analysts anticipate further challenges in 2026. China is scaling back trade-in subsidies for mid to lower-priced vehicles, shifting from fixed amounts to percentage-based incentives tied to vehicle prices. Deutsche Bank analyst Bin Wang forecasts China's retail passenger vehicle sales could fall 5% in 2026 as policy support eases. Despite the headwinds, some analysts, like Nomura's Joel Ying, believe BYD could regain momentum in both domestic and overseas markets after outlining its new strategy and model upgrades following the Lunar New Year.
