Tesla’s Sales Crown Taken by China

June 9, 2025

Tesla and the EV market have been near synonymous since the introduction of the Model S sedan in 2012. Over the last 13 years, Tesla’s grip on the market has seemed near-insurmountable, with a roaring stock price and loyal legions of fans supporting the company’s every move. In 2012, the percentage of cars sold in the US with all-electric powertrains was less than 1%, and globally close to 0.2%. When the Model S went on sale, the EV market was in its infancy with little demand and a lack of infrastructure to back it up. However, times have changed, and in 2024, 22% of all vehicles sold globally and 10% of vehicles sold in the US were EVs. This is a marked shift in consumer demand. A near 11000% increase in global demand is remarkable, and while Tesla has fought tooth and nail to remain at the top, times are changing dramatically. China is now leading the way in EV demand and production, with several native OEMs pushing out new models yearly lauded by journalists at home and abroad. BYD specifically has emerged as a new frontrunner in the global EV arms race, seeking to capture consumer appeal far beyond the border of China. With Tesla seemingly falling behind, industry experts are left to ponder what the EV landscape will look like in a market no longer dictated by Elon Musk.

Earlier this year, global business news sources reported that, for the first time, Tesla was no longer the leading EV OEM in terms of revenue. In fact, China’s BYD reported an annual revenue of $107 billion for 2024, up 29% from their reported earning in 2023. Meanwhile, Tesla reported annual revenue of $97.7 billion, perhaps feeling some effects from the difficult Cybertruck launch and political controversies surrounding corporate leadership. In turn, BYD stocks, listed on the Hong Kong stock exchange, rallied 46% year-to-date, while Tesla’s listing continued its sharp decline, losing nearly a third of its value. As of May 2025, Tesla stock rallied, but still fell well below its historic highs in December of last year. As the US grapples with tariffs on EVs and China simultaneously bolsters domestic EV production, it is not unsurprising to see the success of companies such as BYD. No longer hampered by the engine-making and quality control issues of prior decades, Chinese OEMs are making a name for themselves on the world stage in spite of Western restrictions on their sales. Legacy and newer EV OEMs in the US and Europe alike are going to need to adapt to survive and thrive in this brand new world.

In Q1 2025, US EV sales increased more than 10% year-over-year. Legacy automakers such as Porsche, Toyota, GM, and Subaru saw remarkable growth in terms of EV sales; Porsche sales volume increased 249%, Toyota 196%, GMC 183%, Subaru 173%, and Chevy at 114%. In fact, nearly all legacy OEMs with significant EV efforts enjoyed success in Q1 2025 (except Mercedes-Benz). On the other hand, Tesla backslid by about 10%, and its total market share fell from 5% to 3%. Legacy automakers are finally seeing their years of trial and error pay off, finally giving domestic consumers the electrified trucks, crossovers, and SUVs that they’ve been asking for. Because of the increasing reliability, availability, and plethora of American-oriented options, Tesla is no longer able to keep their near-stranglehold of the market intact. Manufacturers are learning that moving away from the quirky, futuristic EV (such as the Chevy Bolt, Mercedes EQS/B, Tesla Cybertruck) and towards electrified versions of normal cars is leading to greater sales and success. Consumers appear to be far more interested in electrified Ford trucks, Toyota SUVs, and Chevy crossovers than vehicles marketed for their radical or futuristic design cues. Still, Chinese OEMs are continuing to make vehicles in a manner in which Western OEMs cannot, facilitating the dethroning of Tesla on the world stage.

At the crux of the matter, a company like BYD can undercut the pricing of even the most affordable Western EV. Through significant government subsidies, vertical integration, and a very short product development cycle, Chinese EV manufacturers have the ability to produce and sell high quality vehicles at a mere fraction of the cost of a Tesla or Rivian. The vertical integration of battery production in China is an enormous part of their success, with BYD subsidiary FinDreams Battery Co holding the title of the world’s second largest EV battery producer. Coupled with further vertical integration of suppliers, BYD parts cost a lot less than those available to Western OEMs. Simply put, Tesla needing to source batteries and parts from suppliers like CATL or LG Energy Solutions in a free market environment makes cars more expensive. There is no easy solution to this competitive disadvantage, but US and EU legislation focusing on improving local battery and microchip production capabilities is an important step towards making legacy EVs more affordable for the average consumer.

With Tesla’s reign as the king of electric cars over, a new and perhaps more competitive stage of the EV era begins. Innovation and production is happening all over the world. From China to the EU, OEMs are working to improve their products at the most affordable prices in every segment. Anything from cheap compact EV hatchbacks to luxurious full size EV SUVs are available for purchase, appealing to any kind of consumer that is keen on going electric. Political issues do loom large and cannot be ignored, as tariffs have the ability to completely change the market landscape at a moment’s notice. However, sales numbers for 2025 have been better than ever, and right now, the EV market (outside of China) is anyone’s for the taking. Time will tell who becomes the new dominant force in electric vehicles, but it is safe to say that the demand for more advanced technology and better vehicles is here to stay.

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