Tesla vs BYD: Which Stock Is The Better Buy?

TLDR

• BYD overtook Tesla as the world’s top EV seller in 2025, selling 2.26 million vehicles compared to Tesla’s 1.8 million units
• Tesla’s EV sales dropped 9% in 2025 while BYD’s surged 28%, marking Tesla’s second consecutive year of declining sales
• BYD is exploring a potential deal to supply EV batteries to Ford for manufacturing plants outside the U.S.
• Tesla stock trades at a price-to-earnings ratio over 300 with a $1.4 trillion market cap, while BYD has a $140 billion market cap
• BYD operates in over 100 countries and outsold Tesla in Germany and the UK in 2025, but remains banned from the U.S. market

BYD ended 2025 as the world’s leading electric vehicle company. The Chinese automaker sold approximately 2.26 million EVs during the year. Tesla sold 1.8 million vehicles in the same period.

BYD Company Limited, BYDDY

This marks the first time any automaker has outsold Tesla in the EV category. Tesla had led global EV sales for more than a decade. The company’s sales fell 9% in 2025, its second straight year of declines.

BYD’s sales jumped 28% compared to the previous year. The company now operates in more than 100 countries across six continents. It remains locked out of the U.S. market due to tariffs exceeding 100% and national security concerns.

The two companies take different approaches to their businesses. Tesla aims to be recognized as a software company that manufactures electric cars. The company focuses on full self-driving capabilities, robotics, AI, and energy storage.

BYD keeps its focus on creating affordable electric vehicles. The company manufactures all vehicle components in-house through its vertically integrated model. This allows BYD to compete aggressively on price in global markets.

Different Stock Performance Despite Sales Gap

Tesla stock gained 11.4% in 2025 while BYD’s U.S.-traded shares rose 7.6%. Over the past two years, Tesla shares climbed 78% compared to BYD’s 33% gain. Tesla hit a record high in late December 2025.

BYD stock peaked in May 2025 but ended the year 40% below that high. Tesla’s trailing price-to-earnings ratio sits over 300. BYD trades at a lower valuation with a market cap of $140 billion compared to Tesla’s $1.4 trillion.

Wall Street analysts remain divided on Tesla. More than a dozen analysts issued updates this year. Price targets range from 120 to 600, with a mean rating of hold.

BYD Expands Global Manufacturing Footprint

BYD currently offers more than 40 different vehicle models. Tesla has five models in its lineup. BYD sells cars under multiple brands including its flagship brand, luxury brands Denza and Yangwang, and the Fangchengbao SUV line.

The company’s prices range from $12,000 for compact cars in China to over $250,000 for luxury vehicles. BYD also produces plug-in hybrids, though these don’t count toward EV sales comparisons with Tesla.

BYD outsold Tesla in Europe’s two largest EV markets in 2025. In Germany, BYD sold 23,306 new EVs compared to Tesla’s 19,390. UK buyers registered 51,422 BYD vehicles versus 45,513 Teslas.

The company operates one factory in Hungary producing trucks and buses. A second Hungarian plant will begin production in the second quarter of 2026. A facility in Western Turkey is expected to start manufacturing vehicles later this year.

Potential U.S. Market Entry Through Ford Deal

BYD struck a potential deal to sell EV batteries to Ford. The agreement, not yet finalized, would see Ford buy BYD batteries for manufacturing plants outside the U.S. BYD produces batteries for its own vehicles and sells them to other automakers globally, including Tesla.

President Donald Trump said in a Detroit speech that Chinese car companies are welcome to build U.S. factories. No Chinese car companies currently have manufacturing plants in the U.S. Trump told autoworkers that foreign companies using American labor would be welcomed.

BYD released advanced charging technology in March 2025. The company’s 1,000-kilowatt charger can provide 250 miles of range in five minutes. BYD plans to install 4,000 fast chargers in China and 300 in the United Kingdom by the end of 2026.

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