Tesla, the 23-year-old company that brought green cars to the mainstream, has been ousted from its position as the world's leading seller of electric vehicles.
Chinese electric vehicle maker BYD sold hundreds of thousands more cars last year, and not just in China.
In most countries where the Chinese titan took on Tesla (including Germany, Mexico, Thailand and Australia), Tesla lost market share at an unprecedented rate.
The end of federal support for electric vehicles has hurt Tesla's sales in the United States, while the backlash against CEO Elon Musk's political stance has damaged his company's reputation both at home and abroad. Globally, BYD dominates with newer models, better batteries, and lower prices.
“Tesla not only lost its sales crown, it squandered its position as a leader,” said Paul Blokland, co-founder of automotive data company Segment Y Automotive Intelligence. “As the US industry hides behind a wall of tariffs and abandoned electric vehicle plans, Asia has taken up the torch.”
In one of the most extreme examples of Tesla defeat, BYD vehicles invaded the roads of Europe last year. The Chinese company's sales in the top 10 European markets quadrupled in 2025 compared to the previous year, according to Segment Y calculations. Tesla's sales fell 30% during the same period.
As Tesla loses global market share, Musk has been trying to diversify Tesla beyond its electric vehicle roots and rebrand it as an artificial intelligence, robotics and robotaxi company.
On Tesla's earnings conference call last month, Musk announced that he would end production of the Model S and Model X and use the freed-up factory space to produce Optimus humanoid robots. It said it hopes to produce 1 million robots a year at the Fremont manufacturing facility.
“Basically, it's time to end the Model S and X programs with an honorable discharge because we're really moving toward a future that's built on autonomy,” Musk said on the call.
BYD was founded in 1995 in Shenzhen, China, and began as a manufacturer of low-cost rechargeable batteries for consumer electronics, eventually supplying Motorola, Nokia and others.
BYD has now become a global heavyweight in electric vehicles by controlling much of its supply chain and rapidly launching new models. An initial investment from Berkshire Hathaway helped legitimize the company overseas. As BYD expanded its sales in China, Europe and other foreign markets, it has been reshaping competition in the auto industry everywhere it lands.
Due to high tariffs and federal restrictions, you cannot buy a BYD passenger vehicle in the US. But according to experts and customers, BYD offers a higher quality car at a much lower price in other countries. The BYD Dolphin, an all-electric hatchback, starts at less than $14,000 in China.
Experts said BYD has several advantages over Tesla, including a more diverse product offering, lower-cost access to rare earth metals used in batteries and freedom from U.S. labor and safety laws.
“The high-visibility elements of BYD cars appear to be superior not only to Teslas but to many of the cars produced by non-Chinese companies,” said Karl Brauer, an analyst at iSeeCars.com. “Musk has to find another concept on which to build his legacy.”
Tesla offers a few core vehicles with a few variations, including a compact car, a midsize SUV, and the Cybertruck. BYD sells more than eight models including sedans, various SUVs, minivans and pickup trucks.
In countries where you can choose between Tesla and BYD, customers say BYD cars look better, cost less and come with more options.
Melbourne resident Amy de Groot bought her BYD Sealion 6 about a year ago for around AU$55,000. He said there are BYD vehicles all over the roads in his community.
“Everyone who gets in the car is amazed at how beautiful it is,” said De Groot. “It's a beautiful car to look at and inside.”
When he was shopping for an electric vehicle, De Groot didn't think much about buying a Tesla. Teslas peaked in popularity in Australia about five years ago, he estimated, but Musk's reputation has deteriorated significantly since then, he said.
“At the time I was looking, Tesla shares fell very hard and reselling is always a priority for me,” De Groot said. “It was a real fad to own a Tesla, and I just don't think they're competitive in any way.”
According to Segment Y Automotive Intelligence, BYD sold more than 52,000 electric vehicles in Australia in 2025, an increase of 156% from the previous year. Tesla sales in the country fell 24%.
Even in California, where electric vehicles are extremely popular and BYD is nowhere to be found, Tesla is losing market share.
The number of new Teslas registered in California fell more than 11% between 2024 and 2025. Tesla's market share among electric vehicles in the state fell 5 percentage points during the same period, according to recent data from California Auto Outlook. American automaker Chevrolet and Japanese automaker Honda gained market share at the same time.
“The removal of incentives certainly affected Tesla, but at least it doesn't have to worry about BYD in its own backyard yet,” Blokland said.
One of BYD's competitive advantages, analysts say, is its batteries. It started as a battery company and has developed batteries that are more affordable and powerful than the competition.
Another factor is that battery materials are cheaper to source in China, said iSeeCars.com's Brauer.
“When the most expensive part of an electric car is the battery, and you have a huge advantage in the cost of producing a battery, you have a huge advantage in the world of electric vehicles,” he said.
BYD could also be getting help from government support, as well as lower labor costs, experts say.
“Our environmental rules and regulations and our laws on how to treat workers are not instituted globally,” said Brian Moody, an automotive expert and analyst. “It seems to give BYD a financial advantage in that they can charge next to nothing for a car that maybe costs more than that to build.”
While BYD vehicles are not expected to land in the US anytime soon due to trade and security restrictions, they will increasingly be found across the border.
More than 75,000 BYDs were sold in Mexico last year, according to Segment Y's count. Meanwhile, Canada recently reached a trade deal with China that would allow more Chinese electric vehicles into the country.
