BYD Set to Outpace Tesla as World's Largest EV Maker in Historic Shift

Chinese manufacturer BYD is on track to surpass Tesla as the world's leading electric vehicle producer, marking a significant power shift in the global automotive industry. Both manufacturers are due to release their complete 2025 sales figures shortly, but current data suggests the US firm headed by Elon Musk faces near-certain defeat in retaining its market-leading position, news agency AFP has reported.

By the end of November, Shenzhen-headquartered BYD -- which manufactures both pure electric and hybrid vehicles -- had recorded 2.07 million EV sales through 2025.

Also read: BYD's Flash Charging EV Tech Adds 400 km Range in Around 5 Minutes

In comparison, Tesla reported 1.22 million units sold by September's close.

Tesla experienced a temporary sales surge in September, reaching nearly 500,000 vehicles during a three-month window ahead of the expiration of a US tax incentive for electric vehicle purchasers. The credit, worth $7,500, was discontinued under legislation supported by President Donald Trump, who has expressed scepticism regarding climate change.

However, analysts predict Tesla's fourth-quarter sales will decline to approximately 449,000 units, according to consensus estimates compiled by FactSet. This projection would bring Tesla's annual total to roughly 1.65 million—a 7.7 per cent decrease from the previous year and significantly below BYD's November figures.

Deutsche Bank forecasts an even steeper drop, estimating just 405,000 Tesla sales in the final quarter, with declines of approximately one-third in North America and Europe, and one-tenth in China.

Market Adjustment Period

Industry analysts suggest the American EV market requires time to stabilise following the removal of the $7,500 federal tax credit at the end of September 2025, the AFP report added.

Even before the credit's elimination, Tesla had experienced weakening sales in crucial markets, partly attributed to Chief Executive Musk's public endorsement of Trump and other far-right political figures. The company has also encountered intensifying competition from BYD, other Chinese manufacturers, and established European automotive giants.

"We believe Tesla will see some weakness on deliveries" during the fourth quarter, Dan Ives from Wedbush Securities, was quoted as saying in the report.

Sales reaching 420,000 would demonstrate "stable demand," with Wall Street remaining "laser focused on the autonomous chapter kicking off in 2026," Ives noted, alluding to forthcoming self-driving vehicle initiatives.

BYD's International Expansion

Despite rapid growth, BYD faces obstacles within its domestic Chinese market.

With profitability pressured by cost-conscious consumers at home, the manufacturer has pursued expansion into international territories.

BYD represents "one of the pioneers to establish overseas production capacity and supply chains for EVs," according to Jing Yang, Director of Asia-Pacific Corporate Ratings at Fitch Ratings.

"Going forward, its geographical diversification is likely to help it navigate an increasingly complicated global tariff environment," Yang explained.

International competitors have criticised Chinese state subsidies and governmental support mechanisms that enable BYD to offer competitively priced vehicles.

President Trump's predecessor, Joe Biden, imposed 100 per cent tariffs on Chinese EV imports—levies that could potentially increase further under the current administration. The European Union has similarly introduced tariffs on Chinese imports, though BYD is establishing manufacturing facilities in Hungary to circumvent these barriers.

Tesla's Future Prospects

Whilst Tesla's prospects for reclaiming global EV leadership appear uncertain, the American manufacturer retains potential growth opportunities.

Emmanuel Michaeli from TD Cowen believes autonomous technology will play an increasingly vital role for Tesla, with advances in its "Full Self-Driving" (FSD) systems potentially stimulating sales.

"As Tesla really begins to roll out eyes-off features and expand FSD's capability, if they do that successfully, that should generate more demand for their vehicles," Michaeli observed.

Musk has announced the Cybercab, an autonomous robotaxi model, will commence production in April 2026. Additionally, the company has revealed lower-priced variants of its Model 3 and Model Y vehicles, which could bolster sales volumes.