Tesla loses title of world's biggest electric vehicle maker to Chinese rival BYD

Tesla has lost its crown as the world's bestselling electric vehicle maker.

The US firm faced a difficult year with unease over chief executive Elon Musk's political activities and stiff overseas competition that pushed sales down for a second year in a row.

Tesla said that it delivered 1.64 million vehicles in 2025, a decrease of 9% from a year earlier.

Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.

Tesla sales totalled 418,227 between October and December, falling short of the 440,000 that analysts polled by FactSet expected.

The sales total may have been hit by the end of a $7,500 (£5,500) tax credit phased out by the Trump administration at the end of September.

Despite this Tesla stock finished 2025 with a gain of approximately 11%. Investors hope Musk can deliver on his ambitions to make the company a leader in robotaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices.

Shares of Tesla rose almost 2% before the opening bell on Friday, with stock mostly unchanged at $450.27 in early trading.

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The latest quarter was the first with sales of stripped-down versions of the Model Y and Model 3 that Musk unveiled in early October as part of an effort to revive sales.

The new Model Y costs just under $40,000 (£30,000) while customers can buy the cheaper Model 3 for under $37,000 (£27,000).

The new versions are aimed at helping Tesla to compete with Chinese models in Europe and Asia.

For fourth-quarter earnings coming out in late January, analysts are expecting the company to post a 3% decrease in sales and a nearly 40% drop in earnings per share, according to FactSet.

Analysts expect the downward trend in sales and profits to eventually reverse itself further into 2026.

In November, Musk won a shareholder vote that will see him net a $1trn (£742bn) pay package if the firm meets a series of extremely ambitious performance targets over the next 10 years.

Already the world's richest man, he scored another huge windfall last month when the Delaware Supreme Court reversed a decision that deprived him of a $55bn (£408bn) pay package that Tesla gave him in 2018.

(c) Sky News 2026: Tesla loses title of world's biggest electric vehicle maker to Chinese rival BYD