China's BYD has overtaken Elon Musk's Tesla as the world's biggest seller of electric vehicles (EVs), marking the first time it has outpaced its American rival in annual sales.
Tesla car sales dropped by nearly 9% in 2025 to 1.64 million vehicles sold worldwide, the carmaker said on Friday - its second consecutive year of falling car deliveries.
Those figures placed Tesla behind BYD, which said on Thursday that sales of its battery-powered cars rose last year by almost 28% to more than 2.25 million.
The US firm has faced a tough year with a mixed reception to new offerings, unease over Musk's political activities, and intensifying competition from Chinese rivals.
Tesla's car sales fell 16% during the last three months of 2025 partly due to the repeal of a government subsidy that previously helped lower the prices of certain electric and hybrid vehicles.
Wall Street analysts have recently lowered their Tesla sales estimates for 2026, signaling an increasingly gloomy outlook.
Chinese firms such as Geely, MG, and BYD - now the country's largest electric car company - have pressured Western rivals by offering competitive pricing.
In October, Tesla responded by launching lower-priced versions of its two best-selling models in the US to boost sales.
Musk, who is already the world's richest man, is tasked with significantly boosting Tesla's sales and stock market value over the next decade to secure a record-breaking pay package, which could amount to as much as $1 trillion.
As part of the agreement, Musk also has to sell a million humanoid robots over the next ten years. Tesla has invested heavily in its Optimus product and self-driving Robotaxis.
Despite BYD's rise, its sales growth has slowed to the weakest rate in five years due to fierce competition in China, its key market.
Although BYD has surpassed Tesla in sales, Tesla has remained more profitable in recent quarters.
BYD's rapid expansion into Latin America, Southeast Asia, and parts of Europe continues, even with tariffs imposed on Chinese EVs in many countries.
In October, BYD announced that the UK had become its biggest market outside China, with sales surging by 880% due to strong demand for its plug-in hybrid SUV.
