by SONG Jianan

China's BYD overtook Tesla in global electric-vehicle sales in 2025 for the first time, company disclosures showed, marking a shift in leadership in the fast-growing EV market.

On a battery-electric basis, BYD said its BEV sales rose 27.86% last year to 2.257 million units worldwide. Tesla delivered 1.636 million vehicles, down 8.6% from a year earlier, extending its decline for a second consecutive year.

Including plug-in hybrids, BYD's total new energy vehicle (NEV) sales reached 4.602 million units globally in 2025, up 7.73% year on year, underscoring its scale advantage across multiple powertrain segments.

In late December, BYD rolled off its 15 millionth new energy vehicle, the Denza N8L. The company said it took 17 years to produce its first 10 million NEVs, but only 13 months to add the next 5 million, highlighting the speed at which China's auto industry has expanded.

BYD's growth has been underpinned by heavy investment in engineering and technology. The company employs about 120,000 engineers and spent 43.75 billion yuan on research and development in the first three quarters of 2025, up 31% from a year earlier. Cumulative R&D spending has exceeded 220 billion yuan.

The reversal is notable given remarks by Tesla chief executive Elon Musk in 2011 that he did not see BYD as a competitor. When the clip resurfaced in 2023, Musk said the comments were outdated and acknowledged that BYD's vehicles had become highly competitive.

Tesla's weaker showing had been widely anticipated. The company earlier published a compilation of analysts' expectations indicating that 20 institutions forecast a 15% year-on-year drop in fourth-quarter deliveries and full-year sales of about 1.64 million vehicles. While Tesla said it did not endorse those forecasts, its final numbers came in below expectations.

The US carmaker has faced mounting pressure from policy shifts and intensifying competition. The US$7,500 federal EV tax credit expired at the end of September 2024, pulling demand into the third quarter and leaving the final months of the year weaker. Tesla's move in October to introduce sub-US$40,000 standard versions of the Model 3 and Model Y had limited impact.

Analysts at Deutsche Bank said BYD's expanding model lineup and new technology platforms could further strengthen its position, potentially allowing it to extend its lead as competition in the global EV market intensifies.