China’s BYD is on track to overtake Elon Musk’s Tesla as the world’s largest seller of electric vehicles (EVs), marking the first time it has outpaced the American company in annual sales.
On Thursday, BYD reported that sales of its battery-powered cars rose nearly 28% last year, reaching more than 2.25 million vehicles. Tesla is expected to release its full 2025 sales figures on Friday, but analysts’ estimates suggest it sold around 1.65 million cars for the year.
Tesla has faced a challenging year, with mixed reactions to new models, scrutiny over Musk’s political activities, and growing competition from Chinese rivals. Companies such as Geely, MG, and BYD — now China’s largest EV maker — have been undercutting Western brands by offering more affordable vehicles. In response, Tesla launched lower-priced versions of its two best-selling US models in October.
Musk, already the world’s richest person, faces pressure to significantly increase Tesla’s sales and stock value over the next decade to qualify for a record-breaking pay deal potentially worth up to $1 trillion (£740bn). As part of the agreement, he must also sell a million humanoid robots over the next ten years. Tesla has heavily invested in its “Optimus” robots and self-driving “Robotaxis” to meet these targets.
Tesla’s sales dropped in the first quarter of 2025 after backlash against Musk’s involvement with former US President Donald Trump. Musk also has business interests beyond Tesla, including the social media platform X, rocket company SpaceX, and tunnel-digging venture the Boring Company. Some investors have suggested these commitments, along with his past government role, distracted him from focusing on Tesla. Musk has since pledged to scale back his political involvement.
Despite BYD’s rapid rise, its growth slowed in 2025 — the weakest in five years — partly due to fierce domestic competition. Yet the Shenzhen-based company remains a global EV powerhouse, often pricing its cars below rival brands. Its expansion into Latin America, Southeast Asia, and parts of Europe continues, even amid steep tariffs on Chinese EVs.
BYD’s international growth has been particularly notable in the UK, which became its largest market outside China. Sales there jumped 880% in the year to September, driven by strong demand for the plug-in hybrid version of its Seal U SUV.
