BYD Co. achieved its full-year sales goal and likely overtook Tesla Inc. in 2025 to become the world’s biggest electric-vehicle producer, marking a major achievement tempered by a tough outlook for China’s auto industry in the coming year.
The Chinese EV maker’s Hong Kong–listed shares climbed on the first trading day of the new year, rising by as much as 2.3%, Bloomberg reported.
The Shenzhen-based carmaker delivered 4.6 million vehicles last year, up 7.7% from 2024. That’s in line with a lowered full-year goal the company gave in September. Among the mix, it sold almost as many fully-electric vehicles as it did plug-in hybrids.
Tesla on Friday is expected to report that it delivered around 440,900 vehicles in the fourth quarter, down 11% from a year earlier, according to data compiled by Bloomberg. That would see annual sales come in at around 1.6 million — the second consecutive annual drop.
BYD and its rivals face growing pressure in the coming year as China scales back some incentives supporting EV purchases. An influx of new models is also making domestic competition even fiercer, while trade barriers pose challenges for BYD’s ambitions to expand overseas.
China’s best-selling carmaker has faced stiffer competition in the past year from Geely Automobile Holdings Ltd. and Xiaomi Corp., whose new models and rapid innovations are winning over consumers. BYD’s shares gained 7% last year, but gave up gains from an early rally that saw its shares jump as much as 74% by late May as tougher competition and increased regulatory scrutiny became more prominent.
BYD’s Chief Executive Officer, Wang Chuanfu, said at an investor meeting in early December that the technological headstart the company had maintained over the past few years had diminished and affected domestic sales. He hinted at new technology breakthroughs to come, with the company’s 120,000-strong engineering team giving him confidence about its ability to regain advantages, Chinese media reported.
A bright spot for BYD has been surging overseas sales. Deliveries outside China hit 1.05 million in 2025, exceeding the high-end estimate of 1 million sales, enabling it to offset the company’s decline in its core market. Its passenger EV and hybrid sales fell for the eighth consecutive month, slumping 37.7% in December.
Morgan Stanley said in a note that it forecasts a more meaningful domestic recovery after BYD launches several major facelifts in early 2026 to its line-up.
The company has set a goal to expand overseas sales to between 1.5 million to 1.6 million units in 2026, according to a Citigroup Inc. report from November, which cited a meeting with BYD management.
Pressure is mounting on BYD after it posted back-to-back declines in quarterly profit and found itself at the centre of China’s efforts to rein in aggressive discounting. The growing scrutiny is likely to accelerate consolidation and shake up the hierarchy of the sector.
So far, analysts are confident that BYD can weather the challenges better than others. The company’s total sales could grow to 5.3 million units next year, according to analyst estimates compiled by Bloomberg. Analysts at Deutsche Bank expect new product launches and the unveiling of a technology platform to boost the company’s competitiveness.
That could allow BYD to widen its advantage over Tesla, which is facing difficulties of its own.
The US automaker suffered a sharp drop in sales in early 2025 as it revamped production lines across its factories to prepare for the updated Model Y. Chief Executive Officer Elon Musk’s controversial involvement in the Trump administration also deterred some buyers, while the end of US federal EV purchase subsidies is expected to weigh on demand in the future.
(With inputs from Bloomberg)
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