Another Unexpected Loss for Tesla

By many measures, Tesla Inc. (NASDAQ: TSLA) remains a large success. Its market cap is $860 billion, much higher than Ford’s $38 billion. The leader in global car sales, Toyota, has a market cap of $222 billion. And Tesla still controls about 40% of the electric vehicle (EV) market share in the United States. This is despite a decline in unit sales in the first quarter of 2025.

Tesla is about to lose its most important crown, which is its number one position in the global BEV (battery electric vehicle, which has no other engine) space, to China’s BYD. Counterpoint expects BYD to be the BEV leader in 2025. By the end of the year, it will have a global BEV market share of 15.7%. Tesla will be at 15.3%, and no other car company will have market share in the double digits.

Counterpoint Associate Director Liz Lee notes, “CEO Elon Musk has scored somewhat of an own goal against Tesla and we are about to catch a glimpse of how much the company’s sales were hurt in Q1 2025.” BYD has two big advantages. The first is that it dominated BEV sales in China, which is the largest EV market in the world by far. The other is that it appears BYD has developed technology to charge a car to the level where its range is 300 miles in just five minutes. For most traditional EV chargers, the number is closer to 20 minutes.

Experts could argue that BYD’s new market share position does not mean as much as it would appear at first glance. Its sales outside China are modest because of tariffs and the fact it does not have major production facilities elsewhere in the world. This has started to change, as its sales in Asia have begun to rise.

Tesla’s sales footprint encompasses the European Union, United States, and China. Despite a drop in first-quarter sales, it is a global company, while BYD is not. The frightening fact for Tesla shareholders is that BYD is aggressively expanding outside China. It believes it can double sales this year compared to last year. That will give it 800,000 sales outside its own market.

Elon Musk may be able to reverse Tesla’s sales slide with leading-edge AI-powered self-driving technology. However, BYD has self-driving products similar to those of Tesla. There is no reason to think it cannot keep pace with Tesla in this category.

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