BYD is closing in on Tesla after a record December delivered a good 2024 for the Chinese EV giant.

The company sold 4.25 million new energy passenger vehicles last year, according to data released on Wednesday. (New energy vehicles include both plug-in hybrids and battery electric vehicles.) Sales rose 41% compared with the year before. 

Around 1.7 million, or 40%, of BYD’s 2024 sales were battery electric vehicles. BYD’s U.S. rival Tesla, by comparison, delivered 1.29 million vehicles in the first three quarters of 2024.

Thus, to keep its crown as the world’s top seller of electric cars, Tesla needs to deliver over 400,000 cars in the final quarter to keep ahead of BYD. The U.S. carmaker sold a record 1.81 million vehicles in 2023, and it is expected to reveal its fourth-quarter deliveries for 2024 later this week.

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Analysts expect Tesla to report deliveries of around 500,000 cars, which could help the U.S. automaker fulfill its guidance of “slight growth” for 2024.

BYD has beaten Tesla only once: in the final quarter of 2023. BYD’s battery electric vehicle sales have since trailed Tesla’s. 

Driven by China

BYD’s annual sales figure was helped by a bumper December, with the Shenzhen-based carmaker selling just under 509,440 cars last month, an almost 50% year-on-year jump.

Growth was also driven by plug-in hybrids. BYD sold 2.49 million plug-in hybrid passenger vehicles last year, up 72.8% from the year prior.

With the year over, BYD comfortably exceeded its sales target of 4 million new energy vehicles, putting it in the same range as legacy automakers like Honda and Ford.

BYD’s performance is largely driven by sales in its home market, China. The Chinese EV maker sold slightly over 417,000 new energy passenger vehicles overseas last year, which represents about 10.8% of its overall deliveries and less than its pledge to deliver 500,000 cars overseas in 2024.

The Chinese EV giant is investing in both overseas sales and production. But BYD cars are facing new trade barriers, like the EU’s new tariffs on China-made EVs. Brazil, another important market for BYD, also reinstated import taxes on electric vehicles regardless of origin. 

In contrast, China instituted a “cash for clunkers” program last year, which encouraged consumers to trade in older vehicles for newer electric cars and plug-in hybrids. The stimulus likely boosted EV sales in the final months of the year. While the stimulus expired on Dec. 31, analysts expect Beijing to maintain the vehicle replacement subsidies in some form.