Key Takeaways:
Tesla retook the global battery EV lead from BYD in the first quarter as industry growth moderated, Counterpoint Research data show.
Tesla Inc. reclaimed the No. 1 position in global battery electric vehicle sales in the first quarter of 2026, Counterpoint Research data show, as overall industry growth remained modest and demand weakened in key regions.
"Tesla's pricing adjustments and production efficiencies drove its market share recovery during the quarter," Counterpoint Research said in the report.
The reversal comes after BYD surpassed Tesla in 2025 as the world's top EV and plug-in hybrid seller, according to International Energy Agency data. EVs and hybrids accounted for 53% of new car sales in China last year, BYD's home market, versus 10% in the United States. Globally, 25% of new cars sold in 2025 were electric or hybrid, up from 21% in 2024. Roughly 21 million new electric and hybrid cars were sold worldwide in 2025.
The market share shift highlights the intensifying competition between the two EV giants as the industry enters a slower growth phase. Tesla faces softening demand in the US and Europe, where charging infrastructure has not kept pace with EV adoption — the US added public charging points at a slower rate than all but three other countries from 2020 to 2025, IEA data show. BYD, meanwhile, continues to expand into Southeast Asia and Latin America, with Vietnam's EV share jumping to 40% of new car sales in 2025 from 3% in 2022.
Global EV adoption diverges by region
The gap between leading and lagging markets remains wide. In Norway, 97% of new cars sold in 2025 were EVs or hybrids, the highest share globally, driven by years of tax exemptions and perks such as free tolls and parking. Denmark followed at 71%, Nepal at 68%, and Iceland at 62%. Eight countries now have EV and hybrid shares above 50%, up from four in 2024. At the other end of the spectrum, Japan stood at 3%, Russia at 2%, and South Africa at 1%.
China dominates by volume: 62% of all new electric and hybrid car sales worldwide in 2025 occurred in China. Chinese automaker BYD surpassed Tesla as the manufacturer with the most EV and hybrid sales globally in 2025, and in April 2026, China reportedly exported more EVs than traditional cars for the first time.
What the market share battle means for investors
Tesla shares have historically moved on delivery data and market share metrics, making the Counterpoint report a potential near-term catalyst. The company's ability to regain the top BEV spot shows operational resilience, but the broader demand environment remains challenging. In the US, only 10% of new car sales were EVs or hybrids in 2025, and a Pew Research Center survey found that 53% of US adults lacked confidence in the nation's ability to build sufficient charging infrastructure. For BYD, the quarterly loss of the top BEV position may pressure margins as it continues its global expansion into markets with lower EV penetration, including India, where EVs made up just 4% of new car sales in 2025.
This article is for informational purposes only and does not constitute investment advice.
