Tesla v BYD shares: Here’s why BYD overtook Tesla in 2025, and its not (all) Elon Musk

The Tesla v BYD shares battle is looking pretty one-sided right now and it has been that way for several months. But only this week did Tesla officially lose its crown as largest EV maker. And this is not just because it was overtaken (although primarily it can be attributed to BYD’s growth), but also Tesla’s vehicles are down 9% annually and 16% during Q4.

It is easy to assert it is because of Elon Musk’s ‘other endeavours‘ (X and DOGE) and that Tesla owners are returning them. But what many have not considered (at least not until this week) is the competition.

You see, there are other companies making electric vehicles, both traditional manufacturers and upstart companies. BYD, a company based and listed in China and a company backed by Warren Buffett’s Berkshire Hathaway, is one of the more major EV players. It has upped its presence outside China, opening dealrooms in Australia and even becoming the major sponsor of NRL club the Sydney Roosters.

BYD took a major step forward this week.

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 BYD is winning the Tesla v BYD shares battle

BYD is officially the world’s largest EV producer and its Chinese shares have gained 500% since the Corona Crash. Ironically, BYD despite its growth missed its delivery target of 5.5m vehicles. It sold 4.6m in 2025, well behind that, yet 7% higher than the year before when it sold 4.25m. Of these, 1.046m were exports and this was the first time more than 1m were sold abroad. One of the key reasons was sluggish domestic growth in China.

Now, it is crucial to note that BYD sells some non-electric vehicles and its 4.6m sales does include it. BYD sold 2.25-2.26m EVs in 2025 while Tesla sold 1.63-1.64m (down from 1.78-1.79m in 2025). If you include all vehicles, then Telsa was surpassed back in 2022 but only in 2025 did BYD sell more EVs than Tesla.

Why BYD has won

We noted above that a focus on overseas sales by BYD was a factor. And we’ve noted elsewhere that Musk’s political activities are to blame.

But it is easy to miss things about BYD’s products that Tesla lack. A key moment came back in March when BYD unveiled the latest version of its batteries, and to say they’re impressive would be an understatement. In just 5 minutes, they can charge fast enough for 400km of range. That’s 80km a minute and over 1km a second. Impressive in their own right, but critical because this means they can charge as fast as you can refill a petrol-tank car. Forget about leaving the plug in for hours, you can ‘fill up’ an EV just like diesel cars.

BYD founder Wang Chanfu declared in a livestreamed event from his company’s headquarters,’ In order to completely solve our users’ charging anxiety, we have been pursuing a goal to make the charging time of electric vehicles as short as the refuelling time of petrol vehicle. This is the first time in the industry that the unit of megawatt has been achieved on charging power’.

What has also helped matters is that BYD has more affordable models (i.e. 20-30% less). We know that a key impediment to EV growth has been a lack of options for budget buyers, but this is changing. BYD makes many of its components in-house — including batteries, power electronics and motors — which helps reduce costs and improve margins. Tesla sources significant portions of batteries externally.

Hope for Tesla?

From a customers’ perspective, advantages Tesla still has include the charging network (something BYD does not have outside of China) and that there’ll be no lingering tariffs (at least for cars made in America bound for America). That’s not to say there’s nowhere BYD vehicles can be charged, but these are third-party networks and these can be less consistent even with faster charging speeds.

On top of this, Tesla has begun rolling out autonomous-driving software in America and has plans to roll it out in other markets, including in China where its been difficult to get approval due to stringent regulators (not allowing the transfer of video data from its vehicles to servers outside the country thus making it difficult to train and refine the AI algorithms).

And it appears that Elon Musk has now given up DOGE and is focused on his commercial ventures (even if not exclusively Tesla). The announcement of 2025 deliveries came with the forecast that the AI and autonomous vehicle market could be a $1tn market opportunity and some projections expect up to 70% of this market could be secured. He projected that there could be ‘hundreds of thousands of autonomous Teslas by years’ end’. Also, in late 2025, Tesla introduced lower-priced versions of the Model 3 and Model Y to help defend volumes after the U.S. tax credit changes meaning that qualifying buyers could no longer get a credit of up to US$7,500.

Now obviously this was not for everyone (i.e. certain criteria like assembly in America and battery mineral sourcing rules had to be met) but could cut down the cost of purchase. This is not a ‘phase out’, it is a case of just ending it abrubtly.

At the end of the day, 2026 is more likely to be a year of stabilisation and laying the foundations for growth rather than growing itself. Yes, its efforts may deliver dividends in the years to come, but don’t expect to see Tesla record 10% growth and for BYD to trail Tesla (whatever Tesla records).

What to expect in 2026

Tesla has not given guidance but analysts expect 1.75-1.83m. This would be slightly higher, but well below earlier Musk-era targets – the target was 4m in 2027. Again, there are catalysts that could lead to growth. Meanwhile, BYD aims to sell 1.5-1.6m vehicles abroad, which would be 0.5-0.7m higher than the year before and aims to double the size of its sales network in Europe. No global sales target has been made, but some analysts (i.e. JP Morgan) call for over 6m in sales in 2026.

BYD expects capital expenditures to decline in 2026 as existing battery and vehicle capacity reaches more efficient utilisation — which could support margins and competitive pricing.