Tesla has lost its position as the world’s biggest electric vehicle seller after deliveries fell in 2025, as China’s BYD took the top spot for the year.

The US carmaker said it delivered about 1.64 million electric vehicles worldwide in 2025, down more than eight percent from the year before.

The figure fell short of market expectations and marked Tesla’s second straight year of declining annual sales.

BYD reported sales of around 2.26 million battery electric vehicles over the same period. The gap ended a long-running lead held by Tesla and confirmed a shift that analysts had been watching closely over the past year.

Tesla’s fourth-quarter performance highlighted the slowdown. The company delivered 418,227 vehicles in the final three months of the year.

Analysts had expected closer to 449,000 units based on consensus forecasts. Tesla shares closed lower after the figures were released.

The weaker performance came after the end of a $7,500 US tax credit for electric vehicle purchases in September.

The incentive had supported demand earlier in the year, with many buyers rushing to complete purchases before the subsidy expired. Industry analysts said demand has yet to fully adjust since the change.

Tesla has also faced challenges in several major markets. Sales have softened in parts of Europe, where regulatory approvals related to advanced driver assistance and self-driving systems remain unresolved.

Competition has also intensified, with more electric vehicles now offered at lower prices by Chinese and European manufacturers.

Public reaction to the political activities of Tesla chief executive Elon Musk also weighed on the brand in some markets.

Musk’s open support for US President Donald Trump and other right-wing figures drew criticism and prompted protests at some Tesla facilities, according to market watchers.

Founded in 1995 as a battery company, the Shenzhen-based group has built scale in China’s highly competitive market for so-called new energy vehicles, a category that includes battery electric and plug-in hybrid models. China remains the world’s largest market for electrified vehicles.

The shift is also visible in the Philippines. BYD Cars Philippines now operates more than 60 dealerships nationwide, with sales and service facilities spread across Luzon, Mindanao and other regions.

In 2025, the company delivered its 10,000th new energy vehicle locally. BYD said the milestone shows steady consumer interest in electrified vehicles, even as EV adoption in the country continues to face infrastructure and policy constraints.

Analysts said the result reflects broader changes in the global EV landscape. Electric vehicle sales continue to grow worldwide, but at a slower pace than earlier forecasts.

Price competition has increased, and several governments have scaled back incentives or softened transition targets.

Tesla remains the world’s most valuable carmaker by market capitalization, and investors continue to place weight on its ambitions in self-driving technology, robotics and artificial intelligence. Even so, the 2025 sales figures underline the pressure on its core vehicle business.

This BYD milestone confirms its position as a central player in the global shift to electric mobility as it ends an era where annual EV leadership by Tesla was largely uncontested.