• Tesla's sales fell to 1.64 million in 2025, losing top position to BYD.
• BYD reported sales of 2.26 million electric vehicles, a 28% increase.
• The decline in Tesla's sales is attributed to political controversies and the end of EV tax credits.
• Analysts noted a significant challenge for Tesla due to competition from Chinese and European automakers.
• Despite difficulties, Tesla shares remained resilient, rising about 11% over the year.

Tesla has officially lost its crown as the world's leading electric vehicle (EV) maker, reporting a total of 1.64 million deliveries in 2025, an 8.6% decline from the previous year. In stark contrast, Chinese rival BYD recorded sales of 2.26 million EVs, marking a significant 28% increase. This marks the first time since 2018 that Tesla has been usurped from its leading position, reflecting a growing competitive landscape in the global EV market according to Channel News Asia, South China Morning Post, Los Angeles Times, and Al Jazeera.

In the fourth quarter of 2025, Tesla delivered 418,227 vehicles, falling short of the anticipated 440,000 sales mark~. This decline is largely attributed to the expiration of a $7,500 US tax credit that ended in September and the backlash against CEO Elon Musk's political affiliations, which alienated some of Tesla's customer base. Analysts noted that this political controversy combined with stronger competition from BYD and European automakers has created substantial challenges for Tesla's sales performance, according to Anadolu Agency, and India Times.

Despite these challenges, Tesla's stock saw an increase of around 11% over the past year, reflecting investor hope in Musk's ambitious plans for future innovation, including developments in autonomous vehicles and humanoid robotics. As noted by industry experts, this optimism persists despite the evident struggles in the company's core EV sales performance, illustrating a notable divide between stock performance and operational realities, according to Los Angeles Times and Channel News Asia.

BYD's growth trajectory can also be attributed to its wide range of product offerings, including both high-end and affordable models. The company has received considerable attention for introducing advanced features and expanding its international presence while Tesla roads to maintaining competitiveness amid its declining market share. As competition grows, BYD is positioned to become an even more significant player in the global EV economy, as per Anadolu Agency and India Times.