ZACKS·2026-01-02 15:56Core Insights - The title of the largest electric vehicle (EV) seller globally has shifted from Tesla to BYD, marking a significant change in the industry landscape [1][2] Sales Performance - BYD achieved record sales of 2.26 million battery-electric vehicles (BEVs) in 2025, a 28% increase year over year, while Tesla's deliveries fell 8% to approximately 1.64 million [2][9] Factors Behind the Shift - Tesla's decline is attributed to an aging product lineup and political challenges, including the expiration of the $7,500 U.S. tax credit, which negatively impacted domestic demand and market share in countries like France and Sweden [3][5] - In contrast, BYD's success is driven by a vertically integrated supply chain that allows for cost control and rapid scaling, enabling the company to offer a diverse range of vehicles [4][5] Market Share and Expansion - BYD's strategy of manufacturing its own batteries and chips has resulted in a cost structure that is competitive against Western rivals, contributing to China's impressive 51% EV market share in 2025 [5] - BYD's expansion into markets such as Brazil, Hungary, and Southeast Asia has reduced its dependence on any single economy [5] Investment Opportunities - Given the geopolitical risks associated with direct investment in BYD due to rising protectionism, investors may consider exchange-traded funds (ETFs) that include significant stakes in BYD to mitigate risks while capitalizing on the growth of the EV market [6][7] - Forecasts suggest that EV sales could reach 40% of the global market by 2030, presenting a substantial opportunity for investors [7] ETFs Highlighting BYD - KraneShares MSCI China Clean Technology Index ETF (KGRN) has net assets of $59.6 million, with BYD holding an 8.64% weight in the fund and a 22.1% increase over the past year [10] - iShares MSCI China ETF (MCHI) has net assets of $7.74 billion, with BYD at a 1.59% weight and a 32.3% increase over the past year [11] - KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) also has net assets of $7.74 billion, with BYD at a 4.07% weight and a 43.3% increase over the past year [12]