Chinese automaker BYD has seized the crown as the world’s top electric vehicle seller, ending Tesla’s decade-long reign. Numbers from 2025 paint a clear picture: BYD delivered 2.26 million vehicles while Tesla managed just 1.64 million, representing a 9 percent decline from the previous year for the American manufacturer.
The reversal caps twelve months of turmoil for Tesla. CEO Elon Musk’s political alliance with President Donald Trump alienated customers and triggered protests at company facilities nationwide. His leadership of DOGE, a federal cost-cutting initiative that eliminated thousands of government positions, proved particularly divisive among Tesla’s left-leaning buyers. Musk eventually abandoned the role in May as investor anxiety intensified, but the damage had already been done.
Market conditions for the Texas-based automaker deteriorated further when the federal government eliminated EV purchase incentives in September. The Trump administration phased out the program that had allowed drivers to buy EVs at discounted prices despite the president’s complicated relationship with Musk and general antipathy toward electric vehicles. Sales during the final three months of 2025 reached just 418,227 vehicles, missing even the lowered analyst projection of 440,000 units.
Tesla deployed its first EV, the Roadster, in 2008 and spent years dominating the electric vehicle space with minimal serious competition from established automakers. That landscape has transformed dramatically over recent years as Chinese manufacturers have flooded their domestic market with options across every price segment, and BYD has now emerged as the undisputed leader. The company is now a credible rival in multiple markets worldwide and there are few carmakers that can match or undercut its pricing.
In addition to the headwinds Tesla has been facing, California regulators may soon compound its difficulties. A California judge there determined that the company deceived consumers about driverless taxi safety capabilities, potentially suspending its ability to sell vehicles in the state temporarily. Tesla has responded by introducing more affordable Model Y and Model 3 variants designed to compete with budget Chinese EVs flooding into Europe and Asia.
Wall Street hasn’t abandoned faith in the company yet. Tesla stock gained 11% throughout 2025 as investors wagered on Musk’s robotaxi vision and humanoid robot ambitions materializing into revenue streams. Musk enters 2026 as the planet’s wealthiest individual, with a SpaceX public offering scheduled for later this year potentially pushing the 54-year-old toward trillionaire status.
December also brought a major victory when Delaware’s Supreme Court reversed an earlier ruling and restored his compensation package worth $55 billion that had been frozen since 2018. Separately, Tesla directors approved another performance-based arrangement in November potentially valued at nearly $1 trillion if aggressive benchmarks are achieved. Despite stumbling badly in vehicle sales, Musk’s personal financial trajectory keeps climbing higher.
The descent from grace by a giant EV brand like Tesla gives newer manufacturers like Lucid Motors (NASDAQ: LCID) an opportunity to also rise and grow their share of the market.
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