China’s BYD Passes Tesla to Become World’s Top Electric Vehicle Manufacturer

Elon Musk’s electric vehicle (EV) company Tesla announced a nine-percent drop in sales to 1.64 million vehicles in its year-end report for 2025, while Chinese automaking giant BYD reported a 28-percent increase to over 2.25 million units in its 2025 recap.

These figures show BYD has taken Tesla’s crown as the top EV manufacturer in the world by sales volume.

The BBC noted on Friday that Tesla faced some tough headwinds last year, including the end of heavy U.S. government subsidies for EV purchases, more competition worldwide from Chinese companies, a boycott from American customers who disliked Musk’s political alignment with President Donald Trump, and lack of enthusiasm for the latest Tesla models.

Tesla’s sales gambit for the 2025 model year was introducing cheaper models of its notoriously expensive SUVs and sedans, but the sticker price was only a few thousand dollars lower, causing excitement over the cheaper models to quickly fizzle. The U.S. market remains cool to EVs, while Chinese automakers like BYD offer much cheaper models in other parts of the world.

The BBC noted that BYD itself had weaker sales growth in 2025 than previous years, in part due to stiff competition from other Chinese brands, but its sales still grew enough to surpass Tesla worldwide.

According to BYD’s year-end figures, its hottest market outside China is the United Kingdom, where sales grew by a remarkable 880 percent. Chinese brands now account for roughly ten percent of all vehicle sales in Britain, Spain, and Norway, while China controls about six percent of the remaining European market.

“China has taken a commanding lead in the global industry for electric vehicles (EVs) thanks to years of heavy government subsidies, dominance of the supply chain for lithium ion batteries, and cheaper labor. The increase in Chinese sales has alarmed EU countries, particularly Germany and France, who fear losing millions of automotive jobs if the industry shrivels,” the UK Guardian reported on Wednesday.

The Guardian noted that China has mostly used hybrid vehicles to crack the European Union market, rather than pure EVs, because the EU slapped protective tariffs of up to 38 percent on Chinese electric cars last year. The tariffs were imposed precisely because the EU feared China would use “unfair subsidies” and “artificially low prices” to flood the European market and drive domestic manufacturers out of business.

The left-wing New York Times (NYT) on Friday quoted analysts who expected 2026 to be a “tough year” for the EV industry, but hoped sales could revive in 2027 with the planned introduction of U.S.-made EVs that will not be dramatically more expensive than traditional gas-powered vehicles. For its part, Tesla has begun shifting its emphasis from consumer vehicles to self-driving “robotaxis.”