Since 2023, a fierce race for leadership has begun in the global electric vehicle market. The two main rivals are the American electric vehicle manufacturer Tesla and the Chinese manufacturer BYD.
In a 2011 interview with Bloomberg, Tesla CEO Elon Musk ridiculed BYD's electric car, calling it uncompetitive. But in the fourth quarter of 2023, BYD surpassed Tesla in sales, taking the American brand's top spot in the market. Since then, Musk has acknowledged his mistake and noted that BYD's current electric vehicles have become very competitive. Now Tesla and BYD are neck and neck, and at any moment the balance of power could shift in one direction or the other.
Finam tells the story of the emergence of brands and the rivalry between Tesla and BYD.
From batteries to BYD electric vehicles
BYD is currently known as an electric vehicle manufacturer, but few people know that the Chinese giant started out as a battery manufacturer. Chemist Wang Chuanfu founded BYD in 1995 in Shenzhen, considered one of China's largest technology centers.
In 1996, BYD began producing lithium-ion batteries, which are used in modern smartphones. Soon, there was a boom in mobile devices, and the Chinese company came out on top, starting to supply batteries to the market leaders of the time — Motorola and Nokia.
Business was booming, enabling BYD to list on the Hong Kong Stock Exchange in 2002. The turning point came in 2003 when BYD acquired a small car manufacturer, Xi'an Qinchuan Automobile, and two years later released its first internal combustion engine vehicle. That same year, Warren Buffett's Berkshire Hathaway invested $230 million in BYD.
Given BYD's experience in battery manufacturing, it was no surprise that the company soon decided to expand into the electric vehicle market. In 2020, BYD released the Blade battery, which many believe contributed to the growing popularity of its electric vehicles.
In the same year, BYD released the Han sedan, which was positioned as a direct competitor to the Tesla Model S in the electric vehicle market. In 2020, BYD sold 130,970 electric vehicles. As Bloomberg notes, BYD has made rapid progress over the past five years. In 2024, thanks to government support, aggressive pricing, and overseas expansion, the company became the global leader in the electric vehicle market. BYD's revenue reached a record $107 billion last year.
Tesla's diversified business
In 2003, Martin Eberhard and Marc Tarpenning founded Tesla Motors, a company that developed a sports electric car. In 2004, Elon Musk invested more than $30 million in Tesla. In 2008, Tesla released its first electric car, the Roadster, priced at $109,000. That same year, both founders left Tesla, and Musk became the company's CEO.
In 2010, Tesla went public and raised $226 million. In 2012, the company discontinued production of the Roadster and released the new Model S sedan. Starting in 2012, Tesla also began producing Supercharger stations in the US and Europe, designed for fast and free charging of electric vehicle batteries.
In 2017, Tesla released the Model 3, a $35,000 electric car designed for the mass market. It quickly became the best-selling electric car in history.
In parallel with electric cars, Tesla also developed other areas of business. In 2015, the company introduced a range of batteries for storing electricity generated from solar energy. In 2016, Tesla acquired SolarCity, a solar panel manufacturer, and released solar panels for installation on rooftops, a solar roof with energy-generating tiles, and a large Powerwall battery for storing generated energy and use in inclement weather.
In 2020, Tesla released the Model Y crossover, which became Tesla's best-selling car worldwide in 2023.
In 2024, Tesla's electric vehicle division brought in about $77 billion, despite slowing growth and increased competition. The clean energy division brought in another $10 billion in revenue. Tesla's income from vehicle maintenance, insurance, charging, and technology licensing amounted to about $10.5 billion.
Even when combining the revenue from all of Tesla's businesses, Musk's company lagged behind BYD in terms of financial performance last year.
BYD will once again surpass Tesla in 2025
It appears that BYD will maintain its leadership in the global electric vehicle market in 2025. According to data compiled by Chinese automotive blogger Tongkuai Shuchang, in the third quarter of 2025, the Chinese automaker delivered 1.61 million electric vehicles and hybrids, compared to Tesla's 1.22 million. The CarNewsChina.com portal called BYD's advantage of 388,000 cars over its American competitor significant. Thus, BYD has been leading the electric vehicle market for four consecutive quarters. In the third quarter of 2025 alone, BYD delivered 582,500 electric vehicles, which is 31.4% more than in the same period last year. Tesla delivered 497,100 electric vehicles during this period, showing steady quarterly growth but still lagging behind BYD.
Research company Counterpoint Research predicts that BYD will maintain its leadership in the global electric vehicle market with a 15.7% share by the end of the year.
In September, the US ended its $7,500 electric vehicle rebate program. According to experts, Tesla's higher-than-expected sales in the third quarter were partly due to customers rushing to place orders before the rebate expired. This surge may not continue in the fourth quarter, especially if Tesla raises prices or cuts production.
In addition to the end of discounts in the US, Tesla's decline can be explained by several other factors: increased competition, the lack of major updates to electric vehicles, price pressure, and Musk's controversial political activities, which have negatively affected the brand's reputation.
BYD also has its own problems. As Bloomberg notes, the company's domestic sales have fallen 10% since May, and growth in international shipments has not been able to offset the decline in its home region. At the same time, Beijing has tightened control over the price war in the electric vehicle market, which contributed to BYD's growth.
According to Reuters, instead of its initial target of 5.5 million electric vehicles delivered by 2025, the company now expects to sell 4.6 million electric vehicles by the end of this year.
Aggressive expansion has worked well for BYD in the international market, but more and more markets, from Mexico to Europe, are seeking to limit the rapid spread of cheaper Chinese electric vehicle brands. Experts expect that the release of new BYD cars in 2026 could be a positive catalyst for the company and accelerate its sales growth.
Since March, BYD shares traded in Hong Kong have underperformed most local companies. BYD's Chinese competitors, such as Leapmotor, Geely, and Xiaomi, are growing rapidly.
However, BYD shares are still outperforming Tesla, which has been hit hard this year by Musk's political ambitions.
