In a landmark development for the global automotive sector, Chinese electric vehicle (EV) manufacturer BYD Company has overtaken Tesla Inc. in Europe's two most significant electric car markets during 2025. This pivotal shift occurred in both Germany and the United Kingdom, underscoring a broader trend of BYD's aggressive global expansion coinciding with cooling demand for Tesla in crucial regions.
BYD's Commanding Lead in the German Market
The contrast between the two automotive giants was particularly striking in Germany, Europe's largest car market. Official data from the Federal Motor Transport Authority reveals a dramatic reversal of fortunes. For the full year 2025, BYD's car sales in Germany skyrocketed eightfold to reach 23,306 units. In stark contrast, Tesla's registrations fell by nearly half, landing at 19,390 vehicles. The momentum was decisively in BYD's favour by year's end, with Bloomberg reporting that the Chinese company registered more than twice as many new vehicles as Tesla in December alone.
UK Market Follows Suit as Chinese EVs Gain Favour
The story was remarkably similar in the United Kingdom, the region's second-largest market for plug-in vehicles. BYD, the maker of popular models like the Dolphin hatchback, managed to pull ahead of Tesla in September and maintained that lead through the rest of the year. BYD finished 2025 with 51,422 new vehicle registrations in the UK, comfortably ahead of Tesla's 45,513 registrations. The strong growth of BYD and other Chinese carmakers in Britain has been facilitated by the country's decision not to impose EU-style tariffs on Chinese-made EVs. Their competitive pricing has resonated with cost-conscious consumers and contributed to the UK selling over 2 million new vehicles last year.
The Global Context and Tesla's Mounting Challenges
This European shift mirrors the larger global picture, where BYD has already dethroned Tesla as the world's largest seller of electric cars. In 2025, BYD delivered an impressive 2.26 million EVs worldwide, compared to Tesla's 1.64 million deliveries. Tesla reported a 16% drop in its fourth-quarter deliveries, marking its second consecutive year of declining annual sales.
Tesla's struggles across Europe are attributed to intensifying competition not just from BYD, but also from established European automakers like Volkswagen AG, Renault SA, and BMW AG, which have expanded their own EV line-ups. Furthermore, as reported by Bloomberg, intense backlash against CEO Elon Musk's political activities has significantly contributed to Tesla's difficulties. In a move that may affect demand further, Reuters reported that Tesla has increased prices for vehicle leases, with the monthly cost for a leased Model Y now ranging higher than previous rates.
Meanwhile, BYD continues to push its overseas expansion, even as growth in its home market of China slows due to stricter regulations on heavy discounting. The 2025 sales figures from Germany and the UK stand as a clear testament to the success of this international strategy and signal a new chapter in the EV rivalry.
