Core Insights - Tesla has been a leader in the global EV market, but its dominance is now challenged by BYD, which has surpassed Tesla in sales as of 2026 [2] - BYD's growth has been characterized by consistent sales increases and a broad range of affordable EVs, while Tesla's vehicle deliveries have declined [2][6] - Investors are now considering whether to continue investing in Tesla or shift focus to BYD, the new leader in the EV market [3] Company Overview - BYD is the largest new-energy vehicle and battery manufacturer in China, offering a wide range of EVs and plug-in hybrids, from budget models to luxury vehicles [3] - The company has built significant manufacturing scale and expanded its global presence, contributing to its sales growth [2][3] Stock Performance - BYD's stock experienced volatility, with a notable rally of 74% in early 2025, but it has since given back much of those gains, resulting in a 10% return over the past year [4] - Berkshire Hathaway's exit from BYD shares in late 2025 indicates that even long-term investors are cautious as risks increase [3] Valuation Metrics - BYD's stock is trading at approximately 21 times trailing earnings, which is nearly double the auto industry average of around 11 times [5] - The price-to-sales ratio is near 1 times trailing revenue, aligning with large global automakers, while the price-to-book ratio of about 3.8 is considered elevated [5] Market Dynamics - Global EV sales increased by 28% in 2025, with BYD selling about 2.26 million battery EVs, a 28% YoY increase, compared to Tesla's 1.64 million, which saw an 8.5% decline [6] - Analysts suggest that BYD's milestone in sales may enhance its international expansion efforts and pressure Tesla to innovate its product lineup and improve margins [6]