Back in 2011, Elon Musk laughed off the idea that a Chinese company called BYD could ever challenge Tesla. "Have you seen their car?" he quipped, dismissing them as no real threat.
Fast forward to the end of 2025, and the tables have turned in a way few saw coming.
This week, BYD announced it sold a staggering 2.26 million pure electric vehicles last year – a solid 28% jump from 2024. Tesla? They delivered just 1.6 million, marking an 8.6% drop and the biggest annual decline in the company's history.
For the first time, a Chinese automaker has claimed the crown as the world's top seller of EVs. And BYD did it without selling a single car in the United States – the market that's been Tesla's stronghold.
It's a moment that feels almost poetic. The company Musk once mocked has now overtaken the EV pioneer, even as China remains Tesla's second-biggest market.
The numbers tell a tough story for Tesla. Once growing at nearly 50% a year, they saw their first sales dip in 2024, then a sharper fall in 2025. The final quarter was especially brutal: deliveries dropped 15.6% as American buyers rushed purchases earlier in the year to grab a $7,500 tax credit before it vanished on October 1.
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Add in growing competition from legacy carmakers and newer Chinese rivals, plus backlash against Musk's high-profile political moves – including protests outside showrooms and reports of vandalism – and it's clear why some buyers looked elsewhere.
Tesla tried to fight back with cheaper versions of the Model 3 and Model Y, trimming about $5,000 off the price. But those come with shorter range and fewer features, a trade-off that hasn't fully stemmed the tide.
Meanwhile, in China – the world's biggest car market – BYD has been battling through intense price wars and fierce rivalry. Over 150 brands are fighting for share, with upstarts like Geely, Leapmotor, and even phone-maker Xiaomi chipping away at BYD's lead.
BYD's domestic market share slipped from 35% in 2023 to 29% through late 2025, and overall growth (including hybrids) slowed to its weakest in years. Even profits took hits in recent quarters.
But founder Wang Chuanfu isn't backing down. He admits the tech edge has narrowed and products need more standout appeal, but promises fresh innovations are on the way.
It's a classic tale of ambition and grit. BYD started as a battery maker, then leapt into cars, expanding aggressively overseas despite tariffs in some markets. Today, they're not just surviving China's brutal EV battlefield – they're winning on the global stage.
Tesla investors, though, are still betting on Musk's bigger vision: robotaxis, humanoid robots, the next big thing. Shares ended 2025 up nearly 19%, shrugging off the sales slump. But the robotaxi rollout has been slower than promised – limited to just Austin and San Francisco, far from the nationwide fleet Musk predicted.
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This shift isn't just about two companies. It's a sign of how fast the EV world is changing, with China leading the charge. For everyday drivers in the US, UK, Australia, and beyond, it means more choices – and perhaps lower prices – are coming, even if politics and trade barriers slow things down.
One thing's clear: the electric future is here, and right now, it's wearing a BYD badge. What a turnaround.