Alright, today we are looking at an epic rivalry that has just moved to a whole new level. Tesla versus BYD. And yes, for the first time in history, Tesla is no longer the largest electric vehicle company in the world.
For the first time, BYD has overtaken it. And not by a narrow margin. By a clear one. And while many expected this to happen at some point in the future, almost no one thought it would happen this fast.
IS TESLA IN FREE FALL?
Let’s start with how Tesla has been performing lately, specifically in Q4 of 2025. Tesla reported 418,227 vehicle deliveries. That may sound like a big number, but it is down 16 percent year over year. It also came in well below market expectations, which were around 423,000. For the full year 2025, Tesla delivered 1.64 million vehicles, marking a decline of about 8 to 9 percent compared to 2024.
What caused this drop? First, the removal of government EV subsidies in the United States, which pushed many buyers to purchase earlier, in Q3 instead of Q4. On top of that, sales in Europe and China were frankly poor. In Europe alone, Tesla saw registrations fall by 39 percent, while BYD was rising impressively. And of course, Elon Musk’s political rhetoric did not help either, as it triggered backlash in several countries.
Still, there is one bright spot: Tesla’s energy business. In Q4, the company deployed 14.2 GWh of energy products, setting a new record. This shows that beyond cars, Tesla is steadily strengthening its position in energy storage. We are talking about large-scale home batteries, systems for data centers, and solutions for power grids. This segment is growing consistently and proves that Tesla is not just a car company.
And this is where the game changes. Tesla’s stock initially dipped after the numbers were released, but yesterday it ultimately closed up 3.1 percent.
Why? Because investors no longer see Tesla as a simple automaker. They see it as a technology bet. A bet on AI, on robotaxis, and on Optimus robots that promise to reshape the labor industry as we know it.
For example, Canaccord Genuity, despite cutting its Q4 estimates, raised its price target to 551 dollars from 482. As one of its analysts put it, demand may be under pressure, but beneath the surface something much bigger is being built.
The same analyst also pointed out that the end of subsidies in the US created a healthier and more resilient market. And that, aside from Rivian, no other company appears capable of seriously challenging Tesla’s market share over the long term.
BYD
Now let’s turn to BYD, the big surprise of 2025. BYD sold 2.26 million fully electric vehicles during the year. That is a 28 percent increase compared to last year. For five consecutive months, it recorded more deliveries than Tesla and has now taken the top spot in global EV sales. This is the first time this has happened, and likely not the last.
Models like the Seagull, Dolphin, and Yuan Plus dominated. With affordable pricing and wide distribution, BYD conquered China, surged in Europe with a 240 percent increase in registrations, and is preparing to expand into markets such as Latin America and Southeast Asia.
And the most ironic part? Elon Musk once publicly laughed at BYD, saying they did not even have a good product. Well, it might be time to rethink that. Because not only do they have good products, they also know how to sell them at massive scale.
