BYD announced on Thursday that sales of its fully electric vehicles climbed by nearly 28% last year to more than 2.25 million units. The figure puts the Shenzhen-based automaker ahead of its closest rival, Tesla, which is expected to report annual sales of around 1.65 million vehicles when it releases its final numbers later on Friday, based on analyst estimates previously shared by the company.
If confirmed, it would be the first time BYD has surpassed Tesla in annual global EV sales, underlining the growing strength of Chinese manufacturers in a market once dominated by Western brands.
Tesla has endured a challenging year marked by intensifying competition, particularly from lower-priced Chinese rivals, as well as a lukewarm response to some of its newer models. Concerns among investors have also grown around chief executive Elon Musk’s political involvement and the extent to which his attention has been divided across multiple ventures.
Chinese automakers including BYD, Geely and MG have steadily increased pressure on Western carmakers by offering competitively priced vehicles, often undercutting established brands while expanding rapidly in overseas markets. In response, Tesla introduced cheaper versions of its two best-selling models in the United States in October in an effort to revive demand.
The competitive backdrop comes as Musk faces ambitious expectations tied to a landmark pay package approved by Tesla shareholders in November. The deal, potentially worth up to $1 trillion, is contingent on dramatic growth in Tesla’s sales and market value over the next decade. It also includes targets linked to emerging businesses such as humanoid robots and autonomous “robotaxi” services, areas in which Tesla has invested heavily through its Optimus project and self-driving technology.
Tesla’s sales momentum was further tested early in 2025, when deliveries dipped amid backlash over Musk’s role in US President Donald Trump’s administration. At the same time, Musk’s responsibilities across his wider business empire — including SpaceX, social media platform X, and the Boring Company — fueled investor concerns that Tesla was not receiving sufficient focus. Musk has since said he will significantly scale back his government role.
Despite BYD’s ascent, the company has not been immune to headwinds. Its sales growth slowed in 2025 to the weakest pace in five years, reflecting fierce price competition within China, its largest market. Even so, BYD’s ability to sell vehicles at prices often lower than global rivals has helped it maintain its position as a dominant force in the EV sector.
International expansion has been a key driver of BYD’s rise. The company has made strong inroads into Latin America, Southeast Asia and parts of Europe, even as several countries impose steep tariffs on Chinese-made electric vehicles. In October, BYD said the UK had become its largest market outside China, reporting an 880% surge in British sales in the year to the end of September, boosted by demand for the plug-in hybrid version of its Seal U SUV.
As Tesla prepares to confirm its annual figures, the comparison with BYD is likely to sharpen debate over pricing, innovation and global strategy in the EV race — and signal how quickly the balance of power in the industry is changing.