China's BYD has overtaken Elon Musk's Tesla as the world's biggest seller of electric vehicles (EVs), marking the first time it has outpaced its American rival in annual sales.
Tesla car sales dropped by nearly 9% in 2025 to 1.64 million vehicles sold worldwide, the carmaker said on Friday - its second consecutive year of falling car deliveries.
Those figures placed Tesla behind BYD, which said on Thursday that sales of its battery-powered cars rose last year by almost 28% to more than 2.25 million.
The US firm has faced a tough year with a mixed reception to new offerings, unease over Musk's political activities, and intensifying competition from Chinese rivals.
Tesla's car sales fell 16% during the last three months of 2025. The drop was partly due to the repeal of a government subsidy that had helped reduce costs significantly for electric vehicles.
Wall Street analysts have recently lowered their Tesla sales estimates for 2026, signalling an increasingly gloomy outlook.
Chinese firms such as Geely, MG, and BYD have put pressure on Western rivals by pricing their vehicles below established brands.
In October, Tesla launched lower-priced versions of its two best-selling models in the US as a bid to boost sales.
Musk faces increased scrutiny as he balances his extensive business interests beyond Tesla, which include social media and aerospace ventures, along with his ambitious targets for growth and profitability to secure a record-breaking pay package.
Despite BYD's rise, the company's sales growth slowed in 2025 to the weakest rate in five years, partly due to fierce competition in China, its key market. However, BYD remains a global EV powerhouse, expanding its market presence in Latin America, South East Asia, and parts of Europe.
In the UK, BYD recently reported an 880% surge in sales, driven by strong demand for its plug-in hybrids.
