China’s BYD is set to overtake Elon Musk’s Tesla as the largest seller of electric vehicles (EVs) in the world, marking the first time that it has overtaken its US rival in terms of annual sales.
On Thursday, BYD said sales of its battery-powered cars rose nearly 28% last year to more than 2.25 million.
Tesla, which is scheduled to disclose its total sales for 2025 later on Friday, last week published analyst estimates that it had sold about 1.65 million vehicles for the full year.
The US company has faced a difficult year with a mixed reception of new offerings, unease over Musk’s political activities and increasing competition from Chinese rivals.
In October, Tesla introduced lower-priced versions of its two best-selling models in the US to boost sales. It faced criticism that it was slow to release new and more affordable options to remain competitive.
Musk, already the world’s richest man, is tasked with significantly increasing Tesla’s sales and stock market value over the next decade while earning a record-breaking pay package. The deal, approved by shareholders in November, could pay him up to $1tn (£740bn).
As part of the agreement, Musk is also to sell one million humanoid robots over the next ten years. Tesla has invested heavily in its “Optimus” product and self-driving “robotaxis”.
Tesla sales declined in the first three months of 2025 following backlash against Musk’s role in the administration of US President Donald Trump.
Apart from Tesla, the multi-billionaire’s business interests also include social media platform X, rocket firm SpaceX and tunneling company Boring Company.
Those commitments, along with running Trump’s Department of Government Efficiency (DOGE), led some investors to suggest Musk was not focusing enough on Tesla.
Musk has since promised to “significantly” cut back his role in the US government.
Despite BYD’s rapid expansion in recent years, its sales growth in 2025 is set to slow to the weakest rate in five years.
The Shenzhen-based company faces increasing competition from EV makers like XPeng and Nio in China, its key market.
Still, BYD remains a global EV powerhouse as its prices are often lower than rival carmakers.
of the company The rapid expansion – particularly in Latin America, Southeast Asia and parts of Europe – has come despite many countries imposing heavy tariffs on Chinese EVs.
In October, BYD said the UK had become its biggest market outside China. The company said its UK sales rose 880% in the year to the end of September due to strong demand for the plug-in hybrid version of its Sealed U sports utility vehicle (SUV).
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