The electric vehicle (EV) industry is bracing up for an electrifying showdown in 2025 as two heavyweights — U.S.-based Tesla TSLA and China’s BYD Co. Ltd. BYDDY — vie for global supremacy. Tesla’s reign as the global EV sales leader was first toppled by BYD in the fourth quarter of 2023. BYD repeated this feat in the fourth quarter of 2024, solidifying its position as a formidable competitor. During the quarter, BYD delivered approximately 595,000 all-electric vehicles, significantly outpacing Tesla’s deliveries of just under 496,000 EVs, which also fell short of Wall Street expectations.
But just like in 2023, Tesla did manage to hold onto its lead in full-year deliveries for 2024. While China’s EV powerhouse BYD shattered records with its 2024 sales figures, it wasn’t quite enough to dethrone Tesla as the global EV sales champion. However, the race was razor-close. This sets the stage for a high-stakes battle, with investors and industry watchers keen to see who will claim the coveted title of global EV leader in 2025.
Comparing TSLA & BYDDY Sales
In March 2022, BYD stopped producing and selling vehicles powered solely by internal combustion engines, shifting its focus to new energy vehicles (NEVs), comprising plug-in hybrids (PHEVs) and battery electric vehicles (BEVs).
BYD has proven to be a force to reckon with, leveraging its cost-effective battery technology and vertically integrated operations. In 2024, BYD sold over 4.27 million NEVs— hitting the 4 million milestone for the first time ever. Of these, 1.76 million were fully electric vehicles, representing a 41% year-over-year increase.
Tesla, on the other hand, delivered 1.79 million vehicles in 2024, slightly down from 1.81 million in 2023. This marks the first annual contraction in Tesla’s deliveries despite aggressive year-end incentives. CEO Elon Musk’s prediction of modest delivery growth for the year fell short, highlighting the challenges Tesla faces in a more competitive and economically uncertain environment.
The close gap in annual EV deliveries of Tesla and BYD sets the stage for an intense competition in 2025.
EV Sales Forecast for 2025
Global EV sales are expected to grow 30% in 2025, reaching 15.1 million units, according to S&P Global Mobility. This would represent a significant increase in market share, rising from 13.2% in 2024 to 16.7% in 2025.
China, the world’s largest EV market, is projected to see domestic EV sales exceed 12 million units, up 20% year over year. Government incentives and subsidies continue to fuel demand in the region. In the United States, EV sales are anticipated to grow 36% despite potential challenges posed by President Trump’s policies.
BYD: A Rising Powerhouse
BYD’s innovative battery technology, efficient cost structure, and diversified product lineup bode well. The company caters to a wide range of consumers with models like the affordable Seagull and Denza, as well as premium offerings under the Yangwang brand. Its hybrid and EV models, such as the Song and Qin series, consistently rank among the best-sellers in China. The recent launch of its DM 5.0 hybrid system and e-Platform 3.0 further underscores its focus on affordability and efficiency.
Internationally, BYD is making significant strides, with overseas NEV sales surging 72% in 2024 to over 417,000 units. It has tailored its offerings to meet the needs of key markets in Europe, Southeast Asia and Latin America, where local production is set to begin soon.
BYD’s surging global sales are prompting legacy automakers to take bold action. For the first time, BYD outpaced both Nissan NSANY and Honda HMC in vehicle sales in the April-June 2024 period, pushing Japanese automakers to enter into a landmark merger deal. According to various reports, the Chinese EV and battery powerhouse is also on track to surpass Honda and Ford F in global sales for 2024.
With a Zacks Rank #1 (Strong Buy), BYD appears well-positioned to capitalize on its momentum in 2025. The Zacks Consensus Estimate for 2025 sales and earnings implies a 20.5% and 24% uptick, respectively, from the projected 2024 levels.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla: Challenges and Opportunities
Tesla’s EV growth in 2025 hinges on the demand for its existing Model 3/Y lineup, the Cybertruck, and an upcoming affordable EV slated for release in the first half of the year. Musk has projected 20-30% growth in vehicle sales for 2025, but challenges loom large.
Despite upbeat EV projections for the U.S. market, concerns linger over the potential rollback of EV tax credits under Trump’s administration. While this could dampen consumer demand in the United States, Tesla’s massive scale and loyal customer base may cushion the impact. Musk noted that such policy changes could hurt competitors more than Tesla.
China remains a critical battleground, where Tesla faces intense competition from BYD and other domestic players like NIO, Li Auto and XPeng.
Meanwhile, Tesla’s extensive North American Charging Standard network remains a key growth driver. With over 60,000 supercharger connectors globally and adoption by major automakers, Tesla’s dominance in charging infrastructure creates a lucrative long-term revenue stream.
Currently, TSLA carries a Zacks Rank #3 (Hold), reflecting cautious optimism about its prospects in 2025. The Zacks Consensus Estimate for 2025 sales and earnings implies a 17.5% and 32% uptick, respectively, from projected 2024 levels.
Conclusion
The year 2025 promises to be a pivotal one for the EV industry, with Tesla and BYD contending for the global EV crown. BYD’s meteoric sales growth, fueled by cost-effective models and strategic global expansion, positions it as a strong contender to eclipse Tesla’s long-standing supremacy. Meanwhile, Tesla’s innovative edge and robust brand loyalty make it a formidable competitor, despite recent setbacks.
Will 2025 be the year BYD overtakes Tesla, or will Tesla solidify its position as the global EV leader? Only time will tell. But one thing is certain. The race for EV market leadership in 2025 will be one to watch closely.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
