In a significant shift for the global automotive industry, Tesla Inc. has relinquished its position as the world's leading electric vehicle maker to China's BYD Co. Ltd. after reporting an 8.6 per cent decline in sales for 2025.
A Changing of the Guard
The final numbers for the year reveal a clear new leader. Tesla delivered 1.64 million vehicles globally in 2025, a notable decrease from the previous year. In contrast, BYD reported robust growth, selling nearly 2.26 million battery-electric vehicles. This marks a decisive pullaway after BYD came within a narrow margin of Tesla in 2024, having already surpassed it in fourth-quarter deliveries that year.
The fourth quarter of 2025 was particularly challenging for the Elon Musk-led company. Tesla's deliveries fell 16 per cent to 418,227 vehicles, a figure that trailed analyst estimates compiled by Bloomberg.
Beyond Battery-Electric: The Full Picture
BYD's dominance extends when considering its full product lineup. While the headline figures compare pure battery-electric sales, BYD also sold more than two million plug-in hybrid vehicles in each of the past two years, showcasing its broad strategy in the electrified vehicle market.
Wall Street's outlook for Tesla has cooled considerably. Analysts' average delivery estimate for Tesla in 2026 has plunged to around 1.8 million vehicles, a stark contrast to the predictions of over three million that were common just two years ago.
Musk Shifts Focus to Robotaxis
As sales momentum waned, CEO Elon Musk sought to redirect attention to Tesla's future in autonomous driving. He touted progress on the company's long-promised robotaxi business. By the end of 2025, Tesla had begun limited driverless testing, though the service remains in a nascent stage. Consumers can currently only summon rides from a small number of cars in Austin, Texas, and the San Francisco Bay Area, with safety supervisors still present in the front seats.
Musk also built year-end anticipation for the Cybercab, a futuristic two-seat compact car prototype with butterfly doors that was first unveiled in late 2024. The original concept lacked a steering wheel or pedals. However, Tesla board chair Robyn Denholm indicated in an October interview with Bloomberg News that the company is prepared to include those components if required by regulators for sale.
On the markets, Tesla shares saw a modest rise of 1.5 per cent in pre-market trading in New York on Friday, January 2, 2026, attempting to recover from six consecutive declines at the end of 2025. Despite the sales setback, the stock advanced 11 per cent over the course of the year.
The data confirms a major realignment in the electric vehicle sector, with BYD's manufacturing scale and diverse electrified lineup propelling it past the once-dominant Tesla. This transition underscores the intensifying global competition in the race to electrify transportation.
