BYD Secures Top Spot in Global EV Market as Tesla’s Deliveries Decline

The competitive landscape of the electric vehicle industry has shifted decisively. In 2025, BYD solidified its position as the world's leading seller of battery-electric cars, delivering 2.26 million fully electric models and surpassing Tesla's 1.6 million units. This milestone comes amid a complex year for the Chinese automaker, characterized by record-breaking international performance offset by mounting pressures in its domestic market.

While BYD's global ascendancy is clear, its home market presented significant headwinds throughout 2025. Domestic sales contracted for eight consecutive months, with a sharp year-on-year decline of 37.7% recorded for December deliveries of EVs and hybrids. This slowdown eroded BYD's market share in China, which fell from a peak of 35% in 2023 to 29% for the first eleven months of 2025, according to industry data.

The intense competition, involving approximately 150 brands and over 50 pure EV manufacturers, squeezed profitability. BYD reported declining profits in both the second and third quarters of 2025. CEO Wang Chuanfu attributed the challenges to a narrowing technological edge and insufficient product differentiation, promising "substantial innovations" for 2026. In response to the price war, which BYD itself intensified with cuts on more than 20 models in May, the company scaled back production and postponed capacity expansions to better align output with demand.

In stark contrast, the company's overseas business delivered explosive growth, acting as a powerful counterbalance. International vehicle sales skyrocketed by 150.7% to 1.05 million units in 2025, exceeding internal targets. A symbolic victory was achieved in Europe in May 2025, where BYD's registrations of battery-electric vehicles (7,231) briefly surpassed Tesla's (7,165)—a feat accomplished despite the EU imposing an additional 17% tariff on BYD cars following an anti-subsidy investigation.

Financial Performance and Market Reaction

For the full year 2025, BYD reported total vehicle deliveries of 4.6 million, a 7.7% increase from 2024. This figure included the 2.26 million pure EVs, which saw segment growth of 28%, with the remainder consisting of plug-in hybrid vehicles. The results met the company's revised annual target, which had been lowered by 16% in September 2025 due to the toughening competitive environment at home.

Should investors sell immediately? Or is it worth buying BYD?

Tesla, meanwhile, reported 1.6 million vehicle deliveries for 2025, an 8.6% decrease from the prior year and its largest annual decline on record.

Investors responded positively to BYD's overall performance. On the first trading day of 2026, the company's Hong Kong-listed shares advanced as much as 2.3%, opening at HK$95.35 and maintaining stronger footing throughout the session.

Analyst Outlook and Forward Guidance

Looking ahead to 2026, analysts anticipate BYD will continue to outpace many rivals. Bloomberg estimates suggest deliveries could rise to 5.3 million vehicles this year, supported by new models and an updated technology platform. The company has set an ambitious overseas sales target of between 1.5 and 1.6 million vehicles for 2026.

Morgan Stanley maintains an Overweight rating on the stock. The firm notes that high short positions in BYD shares could trigger a self-reinforcing rally if the company shows even modest improvements in sales and global market share. For the international business, Morgan Stanley forecasts 2026 sales of 1.6 to 1.8 million vehicles, representing growth of 68% to 89% over 2025.

The next key event for investors will be the quarterly report scheduled for March 31, 2026. This release will provide detailed figures for the fourth quarter of 2025 and an updated outlook for the current fiscal year.