Chinese EVs surpass Tesla in global sales

Chinese EVs have just taken the global EV crown from Tesla (TSLA).

This is not a blip or a one quarter stumble.

Chinese automakers are now the volume leaders in electric vehicles, and the rest of the industry is playing defense.

Chinese brands have surged past Tesla in global EV sales as exports explode and Western buyers stop treating “Made in China” as a liability.

BYD is now the world’s largest EV seller. In 2025 it delivered more than one million vehicles outside China, more than double the year before.

China became the world’s largest auto exporter in 2023 after passing Japan and shipped over seven million vehicles last year. Chinese brands now control roughly 7 percent of Western Europe’s auto market, with more than 500,000 vehicles sold in the first three quarters of 2025.

Volkswagen is losing ground in China and now faces Chinese competitors on its home turf. Tariffs remain high. The European Union charges duties of up to 27% on BYD vehicles. The United States market is effectively closed unless Chinese firms build locally, something President Donald Trump has openly invited.

BYD is not waiting. It plans roughly 2,000 European dealerships by 2026, has announced factories across Hungary, Turkey, Brazil, Thailand, and Indonesia, and raised $5.6 billion to fund the push.

The disruption behind the news: Expect Chinese EVs to keep gaining market share.

China can build more than 46 million vehicles a year.

Domestic demand does not come close to absorbing that.

Exporting is the pressure valve that keeps factories running and unit costs falling. That scale advantage compounds every year Western manufacturers hesitate.

Chinese EV makers can profitably sell vehicles at price points Western brands cannot touch without bleeding. Lower priced models are not a temporary tactic. They are the market entry weapon. Once volume is secured, premium expansion follows. We are already seeing it.

Tesla’s problem is not brand. It is margin compression. When competitors can undercut you by thousands of dollars and still make money, stock narratives stop mattering. The same dynamic will crush mid market European brands that rely on incremental upgrades and dealer loyalty.

Trade barriers slow this down but do not stop it. Building factories abroad neutralizes tariffs while preserving cost discipline. Hiring Western executives fixes distribution and compliance gaps. This playbook is already working.

For consumers, this means EV adoption accelerates because prices finally fall to mass market levels. For businesses, it means supplier leverage shifts toward Chinese platforms. For regulators, it means tariffs buy time, not safety.

What to watch next

First, watch factory announcements, not showroom launches.

Every new overseas plant locks in long term market access.

Second, watch pricing.

If brands keep cutting prices while expanding margins, incumbents will be forced into consolidation or state support.

Third, watch Europe.

If Chinese EVs cross 10% market share there, the psychological barrier breaks and adoption accelerates.

Over the next 6 to 24 months, the auto industry stops being a Western led export business and becomes a Chinese led manufacturing system with global endpoints. This is what losing industrial leadership looks like, and it does not reverse easily.