This article first appeared on GuruFocus.
BYD (BYDDF) met its full-year sales target in 2025 and is expected to have surpassed Tesla (NASDAQ:TSLA) to become the world’s largest electric-vehicle maker, according to company statements and Bloomberg data. The Shenzhen-based automaker delivered 4.6 million vehicles last year, marking a 7.7% increase from 2024 and matching the revised target it set in September. Sales were split almost evenly between fully electric vehicles and plug-in hybrids, while BYD’s Hong Kong-listed shares rose as much as 2.3% on the first trading day of the new year, suggesting some near-term investor support despite a more uncertain outlook for China’s auto market.
Competitive pressures remain elevated across the sector. Tesla is expected to report fourth-quarter deliveries of about 440,900 vehicles, down 11% from a year earlier, which would put full-year deliveries at roughly 1.6 million and mark a second consecutive annual decline, based on Bloomberg-compiled data. Within China, BYD has faced intensifying competition from Geely Automobile Holdings and Xiaomi, alongside reduced purchase incentives and tighter regulatory oversight. Chief Executive Officer Wang Chuanfu said in early December that BYD’s technological edge has narrowed and weighed on domestic sales, though he pointed to potential breakthroughs ahead, citing confidence in the company’s 120,000-strong engineering team.
Overseas markets have emerged as a key offset. BYD’s international deliveries reached 1.05 million vehicles in 2025, exceeding the company’s high-end estimate and helping cushion weakness at home, where passenger EV and hybrid sales fell for an eighth straight month and dropped 37.7% in December. Looking ahead, BYD has set an overseas sales target of between 1.5 million and 1.6 million units for 2026, according to a Citigroup report, while analyst estimates compiled by Bloomberg suggest total sales could rise to 5.3 million units next year. Still, mounting pressure from back-to-back quarterly profit declines and increased scrutiny of discounting practices could shape a tougher operating environment as consolidation across China’s EV sector accelerates.
