BYD posts slowest annual sales growth in 5 years, but China’s EV giant is still set to outsell Tesla for the first time

Core Insights - BYD's sales growth slowed to 7.7% in 2025, marking the slowest growth rate in five years due to increased domestic competition in China's saturated car market [1] - Despite the slowdown, BYD is expected to surpass Tesla in annual battery electric vehicle (BEV) sales for the first time, selling 2.3 million BEVs in 2025, a 27.9% increase from the previous year [2] Sales Performance - BYD sold 4.6 million vehicles in 2025, up from 4.3 million in 2024, but December sales dropped by 18.3% year-on-year to approximately 420,000 cars [1] - Tesla's sales faced challenges, with estimates predicting 1.6 million BEVs sold in 2025, and projected sales of 1.8 million in 2026, 2 million in 2027, and 3 million in 2029 [3][4] Market Dynamics - The Chinese EV market is highly competitive, with manufacturers reducing prices to gain market share, leading to an oversupply of vehicles [6] - UBS forecasts that the growth rate of EV sales in China will halve in 2026 due to these competitive pressures [6] International Expansion - Domestic competition is prompting Chinese car manufacturers, including BYD, to explore overseas markets, making China the world's largest car exporter [7] - BYD has become the leading EV brand in Southeast Asia, surpassing Toyota in Singapore as the top-selling car brand of 2025 [7] - The company is also expanding into the European market with a new factory in Hungary set to produce 150,000 all-electric sedans annually starting in 2026, alongside plans for facilities in Thailand, Indonesia, and Brazil [8]