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 reduce prices for certain electric vehicles.
Wall Street analysts have recently lowered their Tesla sales estimates for 2026, signalling an increasingly gloomy outlook.
Chinese firms like Geely and MG have put pressure on Western competitors by pricing their vehicles competitively.
In response, Tesla launched lower-priced versions of its two best-selling models in an attempt to boost sales.
Meanwhile, despite BYD's rise, its sales growth has slowed significantly in 2025, attributed to fierce competition in its domestic market.
Nonetheless, BYD continues to expand globally, particularly in Latin America, Southeast Asia, and Europe. The company reported that the UK has become its largest market outside China, with sales surging by 880% over the past year.
