Tesla did not lead the world in electric vehicle (EV) production in 2024. The EV stalwart was overtaken by Chinese automaker BYD. Current trends inside and outside the United States could accelerate the growth of Chinese automakers and leave American automakers poorly equipped to compete globally.
Last year, Tesla built 1,773,443 electric cars. BYD built 1,777,965 — about 4,500 more.
BYD stands for Build Your Dreams. Yes, the company’s name is an abbreviation in English — likely a sign of its global plans. By some measures, BYD may have surpassed Ford and Honda in worldwide sales last year. BYD’s sales grew by an astonishing 40% last year.
Chinese Automakers Growing; American, European Automakers Not
It’s hardly alone. Investor’s Business Daily reports that Chinese EV builders Nio, Zeekr, Li Auto, and XPeng each saw sales growth of 33% or better in 2024. No significant American or European manufacturer matched them.
That could be a sign of things to come. CNN reports, “China’s EV growth has been extraordinary. More than half of new cars sold are electric, putting the world’s largest auto market on a path to all but erase gas-powered cars over the coming decades.”
The companies are seeing dramatic growth on the strength of EV sales in China and the rest of Asia.
The BBC notes, “Demand for electric vehicles has also softened in other regions, such as the U.S. and Europe.” Softening demand doesn’t mean EV sales are slipping. Americans bought a record number of EVs last year.
But sales are now growing more slowly than they were a year ago.
New Federal Policies Designed to Slow EV Sales
In the U.S., meanwhile, a new presidential administration plans to remake government policy to remove incentives for automakers to build EVs and Americans to buy them. A recent slate of executive orders instructed federal agencies to scale back pollution limits and search for ways to stop distributing money for new EV chargers.
Related: What Trump’s Executive Orders Mean for Car Shoppers (So Far)
President Trump has suggested he will end the government’s $7,500 EV tax credit, though he’d need Congress to go along with the plan.
A recent study found that, should the rebates end, EV sales could suffer a 27% hit.
What Happens if the US Diverges From the World?
The moves have many in the industry concerned that American automakers could fall behind globally.
The New York Times explains, “The orders could cause U.S. carmakers to fall behind if they scale back their electric-vehicle programs while Asian and European automakers continue perfecting the technology, analysts say.”
That could lock American automakers out of growing areas of the globe. It also “presents a quandary for automakers,” the Times says. Some might see more short-term domestic profits by returning to older technologies, but they’ll have to neglect their industry’s fastest-growing segment and long-term plans to do it.
Trump has also proposed a 25% tariff on imports from Mexico and Canada. This could add about $3,000 to the price of the average new car, slowing domestic sales.
Related: What Trump’s Tariffs Could Mean for Car Shoppers
Taken together, the tariffs and EV policy rollback could leave U.S. automakers struggling to sell cars domestically and ill-equipped to compete in growing overseas markets that mostly want EVs.
Report: Automakers Asked Trump to Keep EV Rules in Place
Now that President Trump is in office, automakers have refrained from public comment on most of his proposals. But the Times reports that, shortly before he took office, they wrote to ask him to keep Biden-era EV rules in place.
“In a previously unreported November 12 letter to Mr. Trump, John Bozzella, president of the Alliance for Automotive Innovation, which represents 42 car companies that produce nearly all the new vehicles sold in the United States, wrote that in order for the auto industry to remain ‘successful and competitive,’ it needed ‘stability and predictability in auto-related emissions standards’” the Times reports.
Stability seemed hard to come by this week. 2025 will be a pivotal year for the future of the American auto industry.