Sales of BYD electric vehicles closed out 2025, reaching a new benchmark: It surpassed market leader Tesla in overall EV sales.

The OEM sold 2.26 million pure electric vehicles last year, which comprised just under half of all the 4.6 million vehicles it sold when counting plug-in hybrid electric vehicles (PHEVs), according to the company’s official Hong Kong Exchanges and Clear Limited (HKEX) filings.

Meanwhile, Tesla reported a second consecutive year of declining pure-electric vehicle sales, which fell 8.6% to 1.64 million, marking the largest annual drop in the company’s history, according to company filings and news releases. Total production stood slightly higher at 1.65 million, down 5.5% from 2024.

BYD electric cars are not available in the U.S., although it sells heavy-duty electric trucks and buses. while China is Tesla’s second-largest market.

The overriding reasons for Shenzhen, China-based BYD’s first-place finish were that BYD combined low-cost manufacturing, a large China-based presence, and a much broader product lineup that drove exports, while Tesla’s deliveries declined and it lost market share in Europe/China, according to media reports.

BYD’s lower-priced EVs expanded affordability in the mid-priced EV segment, driving higher demand, according to Barron’s. Counterpoint Research credits BYD’s vertically integrated supply chain, which enables competitive pricing and more production efficiency.

Meanwhile, Tesla heavily lost market share in Europe, where sales fell 48% in Germany but BYD increased and exceeded market share, Reuters reported.

Tesla also faced high-profile product issues and recalls with its Cybertruck and other models, while founder and CEO Elon Musk became embroiled in highly controversial political matters in the U.S., according to media reports.