Is BYD about to destroy Tesla?

It was 2011, and Elon Musk was laughing. In a televised interview with Bloomberg, the Tesla boss had been tickled by a question suggesting that the Chinese automaker BYD was a rival. 

“Why are you laughing?” the interviewer asked, to which Musk replied: “Have you seen their car? I don’t think they have a great product.”  It was a classic Musk moment—witty, cocky, and dripping with confidence. 

At the time, Tesla had just gone public with a multibillion-dollar valuation and was about to launch the Model S, which would go on to become the world’s best-selling electric car.

Meanwhile, BYD was struggling. Its sales in China were declining, and abroad, it was making headlines for all the wrong reasons—often accused of copying the designs of other cars. The Chinese automaker was, as one industry analyst put it, “the laughingstock of the industry.”

Fast forward to 2025, and the tables have turned dramatically. BYD has not only caught up but has overtaken Tesla in annual revenue. On Monday, BYD reported 777.1 billion yuan ($107.1 billion) in revenue for 2024—a 29% jump from the previous year—surpassing Tesla’s $97.7 billion in revenue. 

Nobody is laughing at BYD now.

In 2024, BYD sold a staggering 4.25 million vehicles, including 1.76 million pure EVs—almost matching Tesla’s 1.79 million. 

But when you add hybrids to the mix, BYD’s total sales tower over Tesla’s. By early 2025, BYD was outselling Tesla nearly 2-to-1 in the EV space, leaving Musk’s company scrambling for answers. 

It’s a monumental shift, placing BYD firmly in the driver’s seat of the global EV industry. This was supposed to be Tesla’s golden age. Instead, it’s becoming a cautionary tale. 

While BYD’s stock has surged nearly 50% in early 2025, Tesla’s has nosedived by 26.6%. 

Musk’s empire is now dealing with a stale product lineup, growing political controversies, and increasing macroeconomic pressure—including rising U.S. tariffs on Chinese EVs. Tesla is no longer the disruptor; it’s the disrupted.

Tesla’s recent struggles—marked by a stale product lineup, Elon Musk’s growing political controversies, and the looming threat of U.S. tariffs on Chinese EVs—have created the perfect opening for a rival to take the lead. And BYD has seized that opportunity with relentless momentum. Today, the Chinese automaker has firmly established itself as China’s best-selling car brand and is now outselling Tesla on the global stage.

But how did BYD become the world’s top EV manufacturer?

The turning point came in 2008 when Warren Buffett’s Berkshire Hathaway made a game-changing investment in BYD, acquiring nearly 10% of the company for $230 million. More than just a cash infusion, the investment gave BYD global credibility. It signaled to the world that BYD wasn’t just another Chinese automaker—it was a serious player in the future of electric vehicles.

That same year, Wang Chuanfu, BYD’s founder, boldly announced plans to export battery-electric cars to the United States within two years.

But reality hit hard. At the time, electric cars were expensive to manufacture and had limited range. Mr. Wang soon had to abandon his American expansion plans. In a 2011 interview, he even second-guessed his emphasis on fully electric cars, arguing that automakers should focus more on gasoline-electric hybrids. Still, he remained optimistic, noting that “there is tremendous potential in the Chinese market for electric cars.”

By 2012, China’s car production had caught up with demand. Consumers had more choices, and BYD’s unattractive car designs and outdated tech led to a plunge in sales and stock price. Industry analysts began questioning whether BYD had a future in the auto business.

But Mr. Wang made two bold bets that changed everything.

BYD’s Design Overhaul and Battery Revolution

In 2016, Wang hired Wolfgang Egger, a top Audi designer, to revamp BYD’s entire lineup. Egger, along with a team of hundreds of new engineers, gave BYD’s cars a fresh and modern look, shedding its old image of making cheap, poorly designed vehicles. The transformation was radical—BYD’s new models began attracting buyers in droves.

The second game-changing decision was in battery chemistry. Traditionally, EV batteries relied on expensive nickel, cobalt, and manganese. BYD bet big on lithium iron phosphate (LFP) batteries, a cheaper alternative with improved safety. The downside? LFP batteries initially had a lower range than their nickel-based counterparts.

But in 2020, BYD solved that problem. The company introduced its revolutionary Blade Battery, which dramatically improved the range of LFP batteries while being significantly cheaper to manufacture. It was a breakthrough that would tilt the scales in BYD’s favor.

BYD’s Relentless Rise

Since BYD stopped selling internal combustion engine (ICE) vehicles in March 2022—becoming the world’s first major automaker to fully transition to electric and hybrid vehicles—its sales have skyrocketed. 

In 2024 alone, BYD sold 4.25 million vehicles, including 1.76 million pure EVs, nearly matching Tesla’s 1.79 million. But when hybrids are included, BYD dwarfs Tesla’s numbers.

To put things in perspective, Tesla suffered its first annual sales decline in over a decade in 2024, delivering 1.79 million vehicles, down 1% from 2023’s 1.81 million. Meanwhile, BYD’s sales continue to surge. The company hit its 3.6 million annual target a month early and ended 2024 with 4.27 million EV sales. And BYD isn’t slowing down—it aims to sell up to 6 million vehicles in 2025.

BYD’s secret? A lineup that caters to all price segments. While Tesla has focused on high-end EVs, BYD has flooded the market with models at every price point. The company’s Seagull hatchback, priced at just 69,800 yuan ($9,600), is an instant hit in China. Meanwhile, Tesla’s cheapest model, the Model 3, costs 235,500 yuan ($32,300). That’s a massive gap, making it impossible for Tesla to compete in China’s budget-friendly segment. Even in the premium space, BYD’s Han and Tang models are eating into Tesla’s market share.

Beyond affordability, BYD is growing at a staggering pace. Its sales surged by 50% in January 2025 and an incredible 160% in February. Meanwhile, Tesla’s sales slumped in the same months, especially in China and Europe. The contrast is stark—one company is rapidly expanding its footprint, while the other is struggling to hold onto market share.

The “Holy Grail” of EV Charging

If affordability was BYD’s first big win, battery innovation is its second. This month, BYD achieved what industry experts call the “holy grail” of EVs—a battery that can charge in the same time it takes to fill up a petrol tank.

The newly unveiled Super E-Platform boasts 1,000-kilowatt charge speeds, delivering 400 kilometers (249 miles) of range in just five minutes. To put that into context, Tesla’s Superchargers max out at 250kW.

“The new charging performance blows the competition out of the water,” said Ryan Fisher, head of charging infrastructure research at BloombergNEF. “It’s three to four times the charging power Tesla’s vehicles can consume.”

BYD said mass production of this new battery would “completely solve users’ range anxiety when traveling.” The first models to get this technology—the Han L and Tang L—are set to hit the Chinese market next month. Tesla, on the other hand, is still working on its much-touted next-generation battery, a project that has seen multiple delays. Investors were quick to react—Tesla’s stock dropped another 10% following BYD’s announcement.

Tesla’s Struggles and BYD’s Execution

BYD has built a reputation for delivering on its promises, and the numbers prove it. The company had projected 4 million vehicle sales in 2024 but ended the year with 4.27 million deliveries. Tesla, on the other hand, has made a habit of overpromising and underdelivering. Whether it’s the much-hyped robotaxi, ambitious production targets, or the elusive affordable Tesla, the company has struggled to turn words into action. And that’s starting to frustrate both investors and customers alike.

Meanwhile, Tesla’s image has taken a beating in Europe. Musk’s political affiliations and controversial statements have led to protests, showroom boycotts, and a steep 44% drop in Tesla registrations across Europe in February 2025. The once-loyal customer base is beginning to look elsewhere.

And while Tesla has stuck to a limited lineup of vehicles, BYD is flooding the market with options at every price point. The Cybertruck, after years of hype, has been met with mixed reactions, while the Model 3 and Model Y face stiff competition from cheaper, more advanced alternatives. Take BYD’s new Qin L sedan, for instance—dubbed the “Model 3 killer,” it starts at just 119,800 yuan ($16,500), while Tesla’s Model 3 is priced at nearly double that at 235,500 yuan.

But it’s not just pricing where BYD is winning. Its growth numbers are staggering—sales surged by 50% in January and an eye-watering 160% in February. Tesla? It’s been a different story. Sales are slipping in China and Europe, two of its biggest markets.

And then there’s the matter of leadership. While Musk dominates headlines and fuels controversy, BYD’s executives remain largely unknown outside China. That might just be an advantage—BYD is staying out of the political storm while quietly eating into Tesla’s market share.

Tesla’s valuation also paints a concerning picture. Despite its falling growth rate, Tesla continues to trade at around 83x net profits, while BYD, which is expanding rapidly, trades at just 31x. The fundamentals tell a similar story—BYD’s profit margins are improving, while Tesla’s have been declining. Return on assets (ROA) trends suggest that BYD could soon surpass Tesla in efficiency and profitability.

Then there’s the political factor. Musk’s increasing alignment with controversial political figures has made Tesla a divisive brand. 

In Europe, Tesla’s image has taken a hit, leading to showroom protests, calls for boycotts, and an alarming 44% drop in European sales in February 2025. Meanwhile, BYD remains politically neutral, making it easier to expand into new markets without the baggage of controversial leadership.

Is This the End of Tesla’s Dominance?

Not yet. Tesla still has some advantages. It remains far more profitable than BYD, with a net income of $7.6 billion in 2024, compared to BYD’s $5.6 billion. Tesla’s U.S. customer base is still fiercely loyal, and the company is reportedly working on a lower-cost Model Y to regain traction in China.

Tesla’s work in autonomous driving could bring additional value, with robotaxis projected to account for a significant portion of the company’s worth in the coming years. The company is also moving faster than expected in integrating humanoid robots into its ecosystem.

Tesla is not just a producer of electric vehicles. It has invested heavily in autonomous driving systems, with the goal of building fleets of driverless “robotaxis.” It also has a fast-growing energy-storage business and is developing a general-purpose humanoid robot, known as Optimus.

Tesla’s stock has taken a hit, plunging over 40% from its record highs in mid-December. However, Tesla’s leadership, including Elon Musk, remains confident in the company’s long-term vision, particularly in autonomous vehicles, which they believe will redefine its market position.

While BYD continues its aggressive expansion, some analysts argue that Tesla still holds a strong advantage in range, power, and software capabilities. And despite the competition heating up, Tesla’s innovation in AI and robotics could be the game-changer that keeps it ahead in the long run.

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