Chinese BYD snatches the crown of highest EV car sales from Musk's Tesla (file photo)
Reuters, Washington. Tesla has suffered a major setback in the electric vehicle (EV) market due to intensifying competition, ending tax credits in America and slowing demand. Tesla has lost the crown of the world's largest EV maker to China's BYD after annual sales declined for the second consecutive year.
While global EV sales grew 28 percent last year, BYD sold more vehicles than Tesla on an annual basis for the first time. Apart from this, Musk's right-wing ideology and being a supporter of Trump also weighed heavily on Tesla. Due to this, the company has lost its lead in North America and Europe.
BYD benefited from rapid expansion in Europe, where it strengthened its lead over its US rival. The company sold 22 lakh 60 thousand vehicles all over the world including China. On the other hand, Tesla's fourth quarter deliveries declined by 15.6 percent.
The company delivered 4,18,227 vehicles in the October-December quarter, compared to 4,95,570 a year ago. Tesla's sales declined by nine percent on an annual basis.
Tesla's deliveries in 2025 were 16.4 lakh, down from 17.9 lakh in 2024. This is the second consecutive year that the company's annual sales have declined. Demand further weakened in the US after the $7,500 federal EV tax credit expired at the end of September.
Analysts say stiff competition from Chinese companies in North America and Europe, as well as European brands such as Volkswagen and BMW, has increased pressure on Tesla. Meanwhile, Tesla is now focusing more on future projects like robotaxi, robotics and self-driving technology.
There may have been a decline in the sales of Tesla cars, but the company's shares registered a rise of more than 11 percent in the year 2025. This also increased Musk's wealth.
At the same time, BYD, excited by beating Tesla, said that outside China, the company has sold 1 million vehicles in 2025, which is a 150 percent jump compared to 2024. The company has set a target of selling at least 16 lakh vehicles outside China in 2026.