On the Dash:
- BYD delivered 4.6 million vehicles in 2025, positioning it ahead of Tesla in global EV sales.
- Domestic pressure in China intensified as incentives eased and competition increased, while overseas sales surged.
- Analysts expect BYD to weather industry consolidation better than rivals, with growth projected into 2026.
BYD met its full-year sales target in 2025 and is poised to surpass Tesla Inc. as the world’s largest electric vehicle maker, even as competition and policy shifts weigh on China’s auto market.
The Shenzhen-based automaker delivered 4.6 million vehicles last year, up 7.7% from 2024 and in line with a revised target issued in September. Sales included about 2.26 million battery-electric vehicles, nearly matching its plug-in hybrid volume. The results position BYD ahead of Tesla, which is expected to report roughly 1.66 million vehicles sold for the year after a weaker fourth quarter.
Investors responded positively at the start of the new year, sending BYD’s Hong Kong-listed shares up as much as 2.3% on the first trading day. Still, the outlook remains challenging. China is scaling back incentives that have supported EV demand, while a flood of new models has intensified price competition. Trade barriers also complicate BYD’s plans to grow overseas.
At home, BYD faced rising pressure from rivals including Geely and Xiaomi, whose newer models and faster innovation cycles gained traction with buyers. BYD’s passenger EV and hybrid sales in China fell for the eighth straight month in December, dropping 37.7%. The company also posted consecutive quarterly profit declines and came under scrutiny as regulators moved to rein in aggressive discounting.
Overseas markets provided a key offset. BYD delivered 1.05 million vehicles outside China in 2025, surpassing internal expectations and helping balance weaker domestic demand. The company aims to expand overseas sales to between 1.5 million and 1.6 million units in 2026, based on discussions with management cited in November.
Looking ahead, analysts expect BYD to navigate the shakeout better than many competitors. Estimates compiled by Bloomberg project total sales could reach 5.3 million units next year. New product launches and a forthcoming technology platform are expected to support competitiveness, though a more meaningful domestic recovery is forecast after major model updates arrive in early 2026.
Meanwhile, Tesla faces its own headwinds. Production retooling for the redesigned Model Y weighed on early-2025 sales, and the end of U.S. federal EV purchase subsidies is expected to further pressure demand. Together, these dynamics could allow BYD to extend its lead in the global EV race.
