BYD posts slowest annual sales growth in 5 years, but China’s EV giant is still set to outsell Tesla for the first time

BYD’s sales growth fell to 7.7% in 2025 as growing domestic competition in China’s saturated car market sapped momentum at the EV giant. It’s the slowest pace of growth for the company in five years. BYD sold 4.6 million vehicles last year, compared to 4.3 million in 2024. 

Monthly sales for December dropped by 18.3% year-on-year, falling to around 420,000 cars sold, according to a Jan. 1 exchange filing.

Still, the Chinese EV firm is still likely to overtake Tesla in annual battery electric vehicle sales for the first time. The company sold 2.3 million BEVs in 2025, an increase of 27.9% from the year before. 

On Dec. 29, Tesla shared analyst estimates that predicted the company sold 1.6 million BEVs in 2025. Analysts also predicted that Tesla will sell 1.8 million cars in 2026, 2 million cars in 2027, and 3 million cars in 2029. This would fall below Musk’s claim in November that the company would sell 4 million cars annually by 2027.

Tesla sales have struggled this year due to consumer distaste with CEO Elon Musk’s sojourn into U.S. politics. The Trump administration also pulled back subsidies for electric cars, which is likely to slow sales further.

The U.S. car company delivered 1.2 million cars in the first three quarters of 2025; Tesla will likely announce its fourth quarter delivery numbers in early January. 

BYD jumped by 3.6% in Hong Kong trading on Friday. Shares in the EV giant rose by just over 10% over 2025, lagging the broader Hong Kong market. Shares in Tesla rose by 18.6% last year. 

China’s EV market

China’s car market is fiercely competitive, with car manufacturers slashing prices to take market share from their competitors. Heavy investment in EV manufacturing has also led to an oversupply of cars in China, with UBS predicting that the growth rate of EV sales in China will halve in 2026.

Domestic competition is pushing China’s car companies to look overseas for new markets. The country is now the world’s largest car exporter, ahead of traditional carmaking powerhouses like Japan and Germany.

BYD is now the leading EV brand in Southeast Asia, dominating key markets like Thailand and Malaysia. In Singapore, BYD even eclipsed Japanese carmaker Toyota as the top-selling car brand of 2025.

The Chinese car company is also setting its sights on the European market. BYD established its first European car factory in Szeged, Hungary, which is set to start EV production in 2026. The facility will produce about 150,000 compact all-electric sedans a year. BYD is also constructing, or plans to construct, facilities in Thailand, Indonesia, and Brazil. 

This story was originally featured on Fortune.com