The changing of the guard: how China’s BYD swallowed America’s Tesla. Analysis of Tesla’s decline in dominance.

What sounded like a joke a decade ago is now reality: Elon Musk publicly downplayed BYD, and now the Chinese manufacturer has surpassed Tesla in global electric-car sales on an annual basis. The year 2025 became the turning point in which Tesla lost the lead to BYD.

I. The numbers don’t lie: Anatomy of the turnaround (2025)

In 2025, the global EV leader changed. BYD sold around 2.26 million electric cars worldwide, while Tesla delivered approximately 1.64 million units. For Tesla, it was another year of decline, and the fourth quarter of 2025 ended with close to 418,000 deliveries, representing a year-on-year drop.

• BYD (2025): approx. 2.26 million electric cars sold
• Tesla (2025): approx. 1.64 million cars delivered
• Tesla (Q4 2025): approx. 418,000 deliveries (year-on-year decline)

It is worth stressing that BYD is building global scale despite having a limited presence in the United States, while at the same time increasing sales across many markets outside China.

II. BYD: pressure in China, overseas expansion, and the pricing game

Media coverage suggests BYD’s advantage comes from a combination of aggressive pricing and sustained international expansion. In the Chinese market the company operates under intense competition, which pushes its export offensive. In parallel, BYD is strengthening its footprint in Europe and other regions, increasing its global volume.

III. Tesla’s problem: a second year of declines and non-automotive factors

Explanations for Tesla’s weakening tend to revolve around three axes: slower demand, regulatory changes, and an image/political component.

• Demand: the U.S. EV market is advancing more slowly and consumers are more cautious about high-value purchases.
• Regulation: adjustments or cuts to tax incentives for buying electric cars are mentioned.
• Image: public disputes and Musk’s political dimension may have alienated some customers, especially in Europe.

At the same time, Tesla increasingly communicates a pivot toward AI and robotics projects, raising questions about priorities amid competitive pressure and a price war.

IV. Europe as a battlefield: registrations, prices, and tariffs

The rivalry is shifting strongly to Europe. Some reports cite data suggesting that, in one month of 2025, BYD registered more electric cars in Europe than Tesla for the first time. At the same time, price differences are highlighted: Tesla often sits above part of the Chinese competition, even in an environment where additional tariffs apply to certain imported models.

Among the expansion elements, reports also mention the development of the retail network and entry into new countries, including the opening of sales locations in selected Central European markets.

V. Product offering: broad versus narrow

One key contrast is the breadth of the lineup. BYD competes in many segments and refreshes its offerings more frequently. Tesla maintains a more concentrated range, which increases pressure when competitors launch new models across different price bands.

Conclusion: a new phase of competition

The change in leadership in the global EV market is not just a statistic. It is a sign that the center of gravity is shifting toward Chinese manufacturers, and that scale, pricing, and the speed of expansion have become decisive advantages. Tesla remains a strong and recognizable brand, but it must respond to the pressure in volume, price, and product that BYD is imposing.

Key takeaways for the newsroom (Key Takeaways):

1. Turning point: 2025 is the year BYD overtook Tesla globally in electric-car sales.
2. Tesla trend: second year of declines and a weaker Q4 2025.
3. Europe: Europe’s growing importance as the main stage of the rivalry.
4. Mechanism of advantage: scale, expansion, and price competition from BYD; a more concentrated product range from Tesla.