Chinese electric vehicle maker BYD saw its sales growth slow markedly in 2025 as competition in its home market intensified, even as it remained on track to overtake Tesla as the world’s largest EV company by volume.
The company said it sold 420,398 vehicles in December, down 18% from a year earlier and marking its fourth consecutive month of declining monthly sales.
For the full year, BYD’s sales rose 7.7% to 4.60 million vehicles, a sharp deceleration from the 41% growth recorded in 2024.
The slowdown underscores mounting pressure in China’s fiercely competitive EV market, where price wars and rapid product launches have eroded margins and weakened the dominance of early leaders.
Despite slowing growth, BYD is still set to surpass Tesla in global EV sales.
Tesla likely delivered about 1.64 million vehicles in 2025, according to market consensus compiled by the company, The Wall Street Journal reported, as its chief executive, Elon Musk, pivots focus toward artificial intelligence and robotaxi development rather than lower-priced mass-market models.
Tesla’s electric vehicles sit at a higher price point than BYD’s Ocean and Dynasty ranges.
In 2024, chief executive Elon Musk shelved plans for a $25,000 mass-market EV, choosing instead to focus on artificial intelligence and robotaxi projects that he says could transform the auto industry.
Competition erodes technological edge
BYD’s domestic sales were hit by what its management described as a deterioration in its technological advantage.
Chinese media reported that chairman and chief executive Wang Chuanfu told an investor conference in December that the company’s edge built over previous years had weakened, weighing on sales at home.
Wang said BYD would unveil major innovations in 2026, though he did not provide details.
He expressed confidence that the company could reclaim its advantages, citing its 120,000-strong technical workforce.
Rivals have been gaining ground quickly.
Geely delivered 3.02 million vehicles in 2025, up 38.5% from a year earlier, while Leapmotor reached its 500,000-unit target ahead of schedule and raised its 2025 goal to more than 600,000 vehicles.
Leapmotor has also set an ambitious target of 1 million vehicles for 2026.
Overseas markets shine for BYD
While domestic momentum cooled, BYD’s overseas business emerged as a bright spot.
The company delivered about 1.05 million vehicles outside China in 2025, highlighting the growing importance of exports and international expansion to offset softer conditions at home.
In December, premium EV makers NIO and Li Auto also posted strong sales, delivering 48,135 and 44,246 vehicles, respectively.
Nomura auto analyst Joel Ying said their performance was likely driven largely by a final push to deliver existing order backlogs before year-end.
Price wars and policy headwinds
BYD’s aggressive price cuts on more than 20 models in May triggered a selloff in Chinese auto stocks and prompted a rare public warning from Great Wall Motor’s chairman, who said the industry had entered an unhealthy phase.
The company later slowed production and delayed capacity expansion plans, Reuters reported.
Looking ahead, analysts expect further challenges in 2026 as China scales back trade-in subsidies for mid to lower-priced vehicles to encourage technological innovation.
Deutsche Bank analyst Bin Wang said China’s retail passenger vehicle sales could fall 5% in 2026 as policy support eases.
Still, some analysts see a potential rebound.
Nomura’s Ying said BYD could regain momentum in 2026 in both domestic and overseas markets, with the company expected to outline its strategy and model upgrades after the Lunar New Year.
The post BYD sales growth slows in 2025, but EV maker still set to overtake Tesla appeared first on Invezz