BYD has officially taken Tesla's crown and become the world's largest EV seller

• Tesla just lost its status as the world's largest seller of battery EVs to a Chinese rival.
• BYD took Tesla's crown after Elon Musk's automaker reported its second consecutive annual sales drop.
• The Chinese EV maker sold more vehicles than Tesla for the first time in 2024, and has now bested Musk again.

Elon Musk once laughed at the prospect of Chinese EV maker BYD becoming a serious rival to Tesla. He's not laughing anymore.

The Shenzhen-based automaker has surpassed Tesla to become the world's largest seller of battery electric vehicles, capping a meteoric rise that has left Musk's company fighting to preserve its EV dominance.

BYD reported on Thursday that it sold 2.25 million battery-powered EVs in 2025, a nearly 28% rise from the year before. By contrast, Tesla reported annual sales of 1.64 million on Friday, an 8.5% fall.

It's not the first time BYD has outdone Tesla. When including plug-in hybrid vehicles alongside solely battery-powered EVs, BYD surpassed Tesla's sales for 2024. In total, BYD shipped 4.6 million vehicles last year. Tesla does not sell hybrids.

BYD's latest victory is a major blow for Tesla, which has held the title of the world's largest seller of battery EVs since 2018.

The Model Y maker has had a difficult few months, with Q4 sales falling nearly 16% year-over-year after the removal of the $7,500 tax credit for new electric vehicles in the US in September sparked an industry-wide slump in demand.

Tesla has also faced collapsing sales in Europe amid backlash over CEO Musk's politics, and difficulties in China, where EVs are far more widespread than anywhere else.

Tesla is battling fierce competition in China from high-tech, affordable electric vehicles built by an army of local rivals — at the head of which is BYD.

The EV giant, which was once backed by Warren Buffett, has become one of China's top automakers thanks to its wide range of EVs and hybrids, from $200,000 supercars to the $7,800 Seagull hatchback.

BYD has also built a reputation for technological innovation, introducing five-minute EV charging and free autonomous driving features over the past year.

The Chinese automaker has surpassed Tesla despite having a difficult few months itself.

BYD has been hit hard by competition from local rivals like Geely and a crackdown on EV discounting by the Chinese government. Sales dropped 10% year-over-year in December, and the company's stock price has fallen 20% over the past six months.

In more bad news for Tesla, BYD is betting that global expansion will help it shake off the slump.

The EV maker saw international sales soar last year and is planning to open 1,000 new stores in Europe, where it outsold Tesla for the first time last May.

After once dismissing BYD, Musk is now taking the Tesla rival a lot more seriously. In 2023, the billionaire responded to a video clip on X of him laughing off the threat posed by the Chinese company's cars a decade prior.

"That was many years ago. Their cars are highly competitive these days," he said.