Tesla has been dethroned as the world’s foremost electric vehicle manufacturer after a rough 2025, with the title being claimed by the fast-growing Chinese BYD.
Tesla reported that its overall sales fell by 9% from last year, delivering 1.64 million vehicles in 2025. BYD blew past this figure, selling 2.26 million vehicles in 2025 to become the world’s largest EV maker. It sold 1.76 million EVs the year prior, marking a 28% increase. The news reflects China’s growing dominance of the EV industry, buoyed by heavy government investment.
Tesla’s stock wasn’t hit as hard as some expected by the news, however, falling by only 1.3% during midday trading.
BYD’s position is all the more remarkable as it doesn’t sell any vehicles in the United States.
Tesla’s declining position was caused by a number of factors. The Trump administration phased out a $7,500 EV tax credit at the end of September, and the EV maker has struggled to adjust to the new landscape without federal subsidies. The company was also affected in 2025 by Elon Musk’s foray into politics, with his work as part of the Department of Government Efficiency drawing heavy public backlash.
In the late spring, his involvement caused a customer revolt, leading to a terrorism campaign from left-wing activists who firebombed and vandalized Tesla vehicles and property.
Despite being dethroned by BYD, Tesla appears to be retaining its optimism. In November, shareholders approved an unprecedented new pay package for Musk, the company’s CEO, which would make him the world’s first trillionaire if he reached several targets for the company.
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It also released a master plan over the summer to continue growing in the future, described as “sustainable abundance.” It’s banking on artificial intelligence, robotics, and energy storage systems creating an even more favorable landscape for it in the near future.
“The tools we are going to develop will help us build the kind of world that we’ve always dreamed of—a world of sustainable abundance—by redefining the fundamental building blocks of labor, mobility and energy at scale and for all,” Tesla wrote.