Tesla Rival BYD Slams the Brakes as China’s EV Market Takes a Wild Turn

China's EV juggernaut BYD—once hailed as Tesla's fiercest rival—is suddenly downshifting. What's spooking the electric vehicle giant?

Market tremors hit hard

The once-unstoppable growth engine is stuttering as Beijing's subsidy cuts and consumer fatigue collide. BYD's showrooms aren't buzzing like they used to—even as Wall Street analysts keep chanting 'buy the dip.'

Behind the slowdown

Local competitors are flooding the market with cheap alternatives while premium brands eat into margins. Meanwhile, BYD's overseas expansion faces trade barriers that would make a mercantilist blush.

The road ahead looks bumpy

With China's EV adoption curve flattening, BYD's 'growth at all costs' playbook needs rewiring. Maybe they should've hodl'd some Bitcoin reserves instead of betting everything on lithium-ion.

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BYD overtook Tesla as the world’s largest EV manufacturer in 2024 by producing a range of affordable EVs and accelerating production and availability through price reductions. The company sold 4.27 million autos in 2024, most of them delivered in China. For 2025, BYD had set a target to sell 5.5 million cars. Unfortunately, in the first five months of the year, BYD has sold only 1.76 million autos, signaling that its 2025 target could be missed.

BYD Faces Mounting Challenges in China

BYD reportedly has seven auto manufacturing plants in China. Owing to the slowing sales, the company is said to have slowed its existing production and delayed plans to add new production lines. Notably, the company has canceled night shifts, slashing output by at least a third of capacity at four factories.

Moreover, the report cited a survey by the China Automotive Dealer Association showing that BYD dealers’ average inventory stocking period had jumped to 3.21 months in May, significantly higher than the average inventory holding period of 1.38 months. Rising inventory levels across the Chinese EV market prompted the China Auto Dealers Chamber of Commerce to urge EV makers to stop flooding dealers with too many cars and to set reasonable production targets based on sales records.

The company is now turning toward the export markets to drive up its sales. BYD is reportedly targeting to sell 50% of its vehicles outside China by 2030.

BYD vs. TSLA: Which Stock Is the Better Buy?

We used TipRanks’ Stock Comparison Tool to determine which of the two EV giants is currently favored by analysts. Investors can choose to invest in either stock after conducting thorough research.

Despite ongoing challenges, analysts remain highly optimistic about BYD’s long-term stock trajectory, awarding the stock a Strong Buy consensus rating and a Smart Score of ‘Perfect 10!’