BYD surpassed Tesla in annual battery-electric vehicle sales after reporting 2.26 million such vehicles sold in 2025, compared with 1.64 million deliveries by Tesla. The figures marked a change at the top of the global electric-vehicle market after Tesla’s annual total declined for a second consecutive year.
The results were reported on January 2, 2026, retained here as historical context. Tesla’s 2025 deliveries were 9% below the prior year, while its October-to-December total reached 418,227 vehicles. DW calculated that quarterly deliveries were down 15.6% from 495,570 a year earlier. The fourth-quarter outcome also fell short of the 440,000 estimate from analysts recently surveyed by FactSet, according to AP.
Policy changes and stronger competition
Both AP and DW linked Tesla’s performance to several pressures, including intensifying competition from Chinese and European manufacturers, political opposition associated with Chief Executive Elon Musk and the end of a US incentive for electric-vehicle buyers. A $7,500 federal tax credit was phased out by the Trump administration at the end of September.
Tesla introduced lower-priced, reduced-feature versions of the Model Y and Model 3 in early October as part of its effort to improve demand. AP reported that the Model Y version cost just under $40,000 and the Model 3 was available below $37,000. The vehicles were expected to support Tesla’s competition with Chinese models in Europe and Asia.
Despite weakening vehicle deliveries, Tesla shares ended 2025 about 11% higher. Investors were focusing on Musk’s plans for robotaxis, energy storage and robots intended for homes and factories rather than solely on current car sales.
Tesla began introducing a robotaxi service in Austin in June, initially using in-car safety monitors who could intervene, before testing without them. The company hoped to expand the service to several cities in 2026. That plan placed it against Waymo, which AP described as having operated autonomous taxis for years and serving substantially more customers.
Regulation remained a potential obstacle. Tesla faced several federal safety investigations and other inquiries. In California, it risked a temporary loss of its licence to sell vehicles after a judge found that it had misled customers about vehicle safety. Wedbush Securities analyst Dan Ives identified regulation as a major issue, while still expecting Tesla’s autonomous products to overcome setbacks.
Musk said software updates could allow hundreds of thousands of Tesla vehicles to operate without human intervention by the end of 2026. Tesla also planned to begin producing its AI-powered Cybercab, designed without a steering wheel or pedals, during the year.
The sales ranking nevertheless rested on reported 2025 vehicle volumes: BYD’s 2.26 million battery-powered cars against Tesla’s 1.64 million deliveries. BYD was also seeking overseas growth despite substantial tariffs in some markets, while Tesla increasingly asked investors to assess its prospects across autonomous transport, energy storage and robotics alongside its established vehicle business.
