While Chinese electric vehicle (EV) giant BYD surpassed Tesla in terms of total deliveries in the final quarter of 2023, it has now eclipsed the Elon Musk-run company in terms of annual revenues also.

Notably, in 2011 Tesla CEO Elon Musk laughed at the possibility of BYD becoming a competitor to Tesla. However, the Chinese company has proven critics wrong and offers EV models at quite competitive prices.

BYD’s annual revenues rose 29% YoY to $107 billion last year while Tesla’s revenues were around $97.7 billion. The steep rise in BYD’s sales was led by a record 4.27 million deliveries which was well ahead of Tesla which reported a YoY fall in its 2024 deliveries – the first in the company’s history.

BYD Reported Record Revenues in 2024

Notably, BYD sells both hybrids and battery electric vehicles (BEVs). In 2023, hybrids accounted for less than half of BYD’s total deliveries but the contribution has increased meaningfully over the last year and accounted for 58% of its total deliveries. BYD now dominates the Chinese NEV market and the Berkshire Hathaway-backed company has also been looking at international markets to further fuel its growth.

BYD shipped 1.76 BEVs million which was just a tad short of Tesla’s 1.79 million deliveries. Unlike BYD, Tesla only sells BEVs and risks losing its position as the world’s largest seller of BEVs this year.

While BYD had a strong start to 2025, Tesla is struggling with its deliveries. The company’s sales in China – its biggest market after the US – have plunged in 2025. Tesla is battling intense competition in China. Notably, there is already a fierce price war in the Chinese EV market as companies have been cutting prices and offering incentives to spur sales. The Chinese auto market is among the most competitive globally, and domestic players are increasingly taking market share from foreign brands like Volkswagen and Ford.

Tesla’s Deliveries Have Sagged in 2025

Tesla is having a tough ride in Europe also which is home to its Berlin Gigafactory. According to Jato, Tesla’s volumes in Europe plunged 44% last month even as BEV registrations rose 25%. TSLA’s sales in key European markets like Germany and Norway have been particularly weak this year. While the sales decline towards the beginning of the year is seasonal as the company pushes sales towards the end of the year, and some buyers might have held back their purchases to buy the Model Y refresh, Tesla’s sales numbers have disappointed so far this year.

Musk’s Politics Might Be Hurting Tesla

Musk’s association with the Trump administration and his time commitments towards DOGE (Department of Government Efficiency) which he heads, has been making a section of the market apprehensive about the billionaire’s ability to devote adequate time at Tesla. Such concerns have been around for quite some time as apart from Tesla Musk also heads several other companies like SpaceX and Neuralink. Of late, he has added X and his artificial intelligence (AI) startup xAI to the ever-growing list of companies that he owns.

BYD Launches New Model to Take on Tesla’s Model 3

BYF has launched its new Qin L EV starting at $16,500. The model’s specs are similar to Tesla’s Model 3 at half the price. BYD has gained traction with its competitively priced models which have helped it gain a foothold in the price-sensitive Chinese automotive market.

BYD Partnered with DeepSeek

Last month, BYD released an assisted driving system in partnership with DeepSeek – the Chinese startup that made waves with its low-cost artificial intelligence (AI) model.

The driving system which is named “DiPilot” would be offered free along with BYD cars. This would make BYD the only automaker offering assisted self-driving in cars priced below $10,000.

DeepSeek anyways created a storm with its low-cost AI model which the company says it developed at a fraction of what Western rivals like OpenAI build their models for. Through the partnership with DeepSeek, BYD might be able to disrupt the EV industry also as no other player offers advanced self-driving features at this price range.

Analysts believe that BYD offering assisted driving features in budget cars would help increase EV adoption in China which is anyways the world’s biggest market for electric cars. In his note, Jefferies analyst Johnson Wan said, “BYD has now gone from 0 to 1 in [autonomous driving] development, which will accelerate the adoption rate of the function in the mass market and lead to a wave of upgrades by existing users.”

Tesla Halts Testing of Autonomous Features in China

Meanwhile, Tesla has halted the testing of its autonomous driving features and China and said that it would now release them in China after completing regulatory approval. Tesla incidentally does not offer its full self-driving (FSD) features in China. While Tesla expected regulatory approvals in China by the end of 2024 and was looking to offer FSD in the country from Q1 2025, it hasn’t been able to secure the approvals so far.

The name FSD is misleading though as while the software is quite advanced, it is not L4 fully autonomous as the name might suggest. The nomenclature has been a point of contention with US regulators who accuse the company of deceptive marketing.

Meanwhile, last year Tesla launched its “Actually Smart Summon” feature in China. The feature is available in vehicles that have full self-driving (FSD) and enhanced autopilot features and was rolled out through an over-the-air update. The feature allows the car to move from the parking lot to the place where it is “summoned”.

Musk Has Praised BYD

Musk meanwhile changed his views on BYD. In 2023, he praised BYD and termed it “highly competitive.” Last year, during Tesla’s Q4 2023 earnings call, Musk said, “Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.”

The billionaire added, “The Chinese car companies are the most competitive car companies in the world. So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.”