1 Company That Could Overtake Tesla as the World's Top EV Seller. Is the Stock a Buy in 2025?

Key Points

• Tesla's top line is under pressure with revenue declining through the first half of 2025.

• EV competition is more intense than ever, and BYD could soon take the industry crown.

• 10 stocks we like better than BYD Company ›

It has been a rocky year for Tesla (NASDAQ: TSLA). Shares are down about 9% year to date, and analysts expect the company's sales to shrink 5% in 2025. For years, Tesla has been the world leader in sales for battery powered electric vehicles (EVs). That could change in 2026 due to one exciting EV stock.

BYD should finally outsell Tesla

Last year, Tesla sold 1.79 million battery powered electric vehicles. Chinese automaker BYD (OTC: BYDDY) came in second, selling 1.71 million EVs. Importantly, BYD also sold more 2.33 million plug-in hybrid EVs, a style of vehicle that Tesla doesn't even sell. But when it came to pure electric vehicle sales, Tesla remained on top.

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Notably, General Motors came in third place with just under 900,000 battery-powered EVs sold last year -- roughly half of what Tesla and BYD sold. This left Tesla and BYD as the heavyweights in the global EV market, with Tesla just barely on top.

But that could all change this year, given Tesla's struggles. As its sales shrink -- deliveries are down 13% through the first half of the year -- BYD is guiding for battery powered and hybrid EV sales to grow about 7%.

Image source: Getty Images.

Factoring in these expectations, it's likely BYD will replace Tesla as the leading global seller of battery-powered EVs within the next few quarters. But is the stock a buy?

Right now, Tesla shares trade at a lofty price-to-sales ratio of 14. BYD stock, meanwhile, trades at less than 1 times sales. Why the huge discount?

"Most of Tesla's sky-high value is based on robotaxis and robots it hasn't yet produced," notes one Reuters report. BYD, meanwhile, garners most of its valuation from its existing business -- not hype for future products. Then, there is the risk that Chinese regulations could alter BYD's profitability or business model at any time.

BYD stock is priced at a discount, but investors must do their due diligence before jumping in.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company and General Motors. The Motley Fool has a disclosure policy.