Chinese Automaker BYD Tops Tesla to Become World’s Leader in EV Sales

What Happened?

Chinese automaker BYD surpassed Tesla in electric vehicle (EV) sales in 2025, making BYD the new world leader in EV sales. According to Barron’s, BYD sold over two million EVs in 2025, and most of those sales took place in China. Though Tesla has yet to release its fourth-quarter sales totals, it is expected to finish 2025 at one million seven hundred thousand EVs sold.

Despite selling most of its EVs in China, BYD also sold over one hundred thousand EVs abroad in December 2025, which was also a record for the Chinese automaker. 

Why it Matters

Tesla has long been a leader in EV sales, but BYD has overtaken Tesla by offering lower-priced EV models to consumers. In China, consumers receive subsidies for purchasing EVs instead of combustion engine vehicles, though the amount they get is switching this year from a fixed total to a percentage of the sticker price of the EVs they buy. BYD’s accomplishment represents the first time a Chinese automaker has led the world in EV sales for an entire year.

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Over half of all new cars purchased in China during 2025 were EVs, though EV sales are expected to begin levelling off and then declining in the next few years due to market saturation. China’s economic growth and enormous population have combined to create a significant market for EVs, with the total number of Chinese buyers of EVs nearly equaling the totals for the rest of the world put together. Due to economic growth from the last decade, China’s middle class now likely outnumbers that of the United States.

Currently, BYD sales in the U.S. have been poor due to high tariffs, which are at one hundred percent of the sticker price. In China, BYD’s low prices account for its leading sales position, but the tariffs have made it too costly for most American car buyers. Without high tariffs, it is likely that BYD sales of EVs in the U.S. would increase significantly. Similar tariff barriers have limited BYD sales in Europe. 

Meanwhile, Tesla’s sales have declined due to the withdrawal of EV government subsidies by the Trump Administration. In addition, President Trump also loosened emissions regulations that incentivized electric car production in the United States. Because EVs produce fewer emissions than combustion engine vehicles, with strict regulations, car manufacturers had an economic incentive to produce more EVs and fewer gas-powered vehicles. 

How it Affects You

If tariffs were to be lowered in the U.S. and Europe, it is likely that BYD would see a substantial increase in sales of EVs for those markets. In the U.S., if Republicans lose the majority after the 2026 mid-term elections, those tariff rates could change or be dropped altogether.