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China’s BYD ended 2025 after it met a revised sales goal and outpaced Tesla in annual EV volume. The shift puts the Chinese automaker at the top of global electric vehicle sales.
BYD started 2026 with its Hong Kong shares up as much as 2.3%. However, tighter incentives and heavier discounting are now testing growth across the Chinese EV market.
BYD delivered 4.6 million vehicles in 2025, up 7.7% from 2024. The total matched the lower target BYD set in September, highlighting BYD’s scale across price bands and body styles.
Battery electric vehicles made up a large share of the total. BYD sold more than 2.25 million fully electric cars in 2025, with a similar number of plug-in hybrid sales. That dynamic helped BYD defend volume as buyers weighed costs and charging access.
Tesla is due to report its 2025 deliveries after a softer end to the year. Estimates point at about 440,900 in the fourth quarter; that pace suggests around 1.6 million vehicles for the full year.
If the estimate holds, Tesla would post a second straight annual decline. The company retooled lines for an updated Model Y in early 2025. It also faced buyer unease tied to Elon Musk’s political role. In October, Tesla launched lower-priced versions of its key models in the United States.
Chinese brands have continued to price below many established models, which has tightened pricing power. In addition, the planned end of federal purchase subsidies in the United States could pressure demand. Moreover, Tesla has increased its focus on autonomy and robots, as well.
Also Read: BYD Surpasses Tesla in Europe Despite the 30% Profit Drop
China has reduced some purchase support that helped EV adoption. Meanwhile, new models from Geely and Xiaomi have raised feature expectations. As a result, automakers have leaned harder on price cuts and faster refresh cycles.
BYD has acknowledged weaker momentum at home. Its passenger EV and hybrid sales have fallen for eight straight months. December sales dropped 37.7% from a year earlier. BYD has also posted back-to-back quarterly profit declines, which has increased focus on pricing discipline.
Overseas demand has provided a key buffer for BYD. Deliveries outside China reached about 1.05 million in 2025. The export gain helped offset softer results in the core market, landing a 2026 overseas goal of 1.5 million to 1.6 million units.
BYD’s chief executive has said the company’s earlier technology lead has narrowed. He pointed to a 120,000-strong engineering team and upcoming upgrades. Analysts have projected total BYD sales near 5.3 million units in 2026. Even so, trade barriers and tighter scrutiny on discounting could decide the margins and market share.
