Annual sales figures for 2025 show Tesla has lost its crown as the world's top electric vehicle seller to Chinese rival BYD.

Elon Musk's Tesla reported a bigger-than-expected fall in fourth-quarter deliveries on Friday and delivered 1.64 million cars in 2025, down nine percent from the previous year.

On Thursday, BYD said it sold 2.26 million battery-powered cars in 2025.

Tesla came under pressure in 2025

Tesla said it delivered 418,227 vehicles in the October–December quarter, down 15.6 percent from 495,570 a year earlier.

The slump followed the end of a $7,500 tax credit in the United States in September, while Tesla also struggled with political backlash against outspoken Musk and rising competition from Chinese and European rivals.

The shift underscores growing competition in the global EV market. China is the world's largest market for new energy vehicles, including EVs and plug-in hybrids.

Shenzhen-based BYD is also looking to expand its presence overseas, despite facing hefty tariffs in some markets.

Investors still believe in Musk

Tesla investors have brushed off falling sales, focusing instead on Musk's shift toward robotaxis, energy storage, and home and factory robots.

Musk also unveiled cheaper, stripped-down versions of the Model Y and Model 3 in October as part of an effort to revive sales.

To support this vision, Tesla's board granted him a massive new pay package, approved by shareholders in November.

Edited by: Kieran Burke