The global electric vehicle (EV) market is entering a new phase of strategic recalibration.
While projected sales of passenger EVs are set to reach 26.6 million units in 2025, the growth is achieved amidst considerable global headwinds
Source: Euromonitor International
Leading carmakers are adjusting strategies to navigate a complex environment of trade disruptions, intense margin pressures, and evolving consumer preferences.
Tesla: Transitioning beyond EVs
Tesla’s Q2 2025 results reflect a company diversifying beyond EVs. Revenue declined 12% year-on-year to USD22.5 billion due to lower deliveries and reduced regulatory credit revenue. Vehicle deliveries declined in H1 2025, impacted by Model Y line changeovers, price cuts, and intensifying competition. Regulatory credit revenue also declined and operating margins compressed due to increased R&D in AI and robotics.
Despite automotive headwinds, Tesla is doubling down on autonomy and energy. The launch of its Robotaxi service in Austin, Texas and the first autonomous customer delivery signal progress in its AI roadmap. Energy storage deployments hit record highs in both quarters, supported by Megapack production in Shanghai. Services and software revenue grew, with Full Self-Driving subscriptions gaining traction.
BMW: Diversification and discipline
BMW’s H1 2025 results show strategic discipline amid global volatility. Profit before tax fell by 28.6% to EUR5.7 billion, but the company reaffirmed its full-year targets. BMW delivered 1.2 million vehicles in H1 2025, with electrified models making up 26.4% of total sales. The Neue Klasse platform remains central to BMW’s EV strategy, with the iX3 and successors to the X5 and X7 in development.
The company is expecting demand to increase in 2025 due to further stabilisation of inflation and additional moderate cuts in key interest rates in many countries. Inflation rates in the US have been lower than expected despite the effects of additional tariffs. In China, a persistent high level of competition continues, with growth for vehicles in the lower price segments.
BYD: Success at all costs in China
China remains the largest EV market globally, accounting for 55% of EV sales. However, the price war that drove accessibility is now compressing margins. Competition in the Chinese EV market is intensifying, as evidenced by BYD sales figures, with year-to-date growth in July falling to 27% compared to 33% in June. BYD initiated a price war in China in May in a bid to generate more sales, but the gamble backfired on BYD. The market turbulence reflects intensifying competition and has drawn attention from the Chinese government.
BYD is expanding internationally with new facilities in Hungary aimed at mitigating tariff exposure. The Chinese company has also expanded into Southeast Asia and leads EV sales in Malaysia, Thailand, and Indonesia with its price-competitive line-up. The move into international sales marks a shift from domestic dominance to global ambition, as growth in China begins to plateau amidst intense competition.
VinFast: A silent market leader in Vietnam
VinFast is the only carmaker in Vietnam focused solely on EVs, while others remain reliant on petrol models. It has boosted sales through incentives, including instalment and discount plans for Xanh SM ride-hailing drivers. VinFast has reported that it has installed over 150,000 charging ports across all 63 provinces to address concerns on inadequate charging infrastructure and limited range, mirroring Tesla’s strategy.
The company delivered 97,399 EVs in 2024, a 192% increase from 2023, underscoring strong growth momentum and positive market reception. The company also benefits from local manufacturing and government incentives. Geopolitical uncertainties and competition from foreign brands that lack charging networks further reinforce VinFast’s edge. By aligning with Vietnam’s COP26 commitments and leveraging its vertical integration, VinFast is well positioned to navigate evolving market and policy landscapes.
Outlook
The EV market is shifting from rapid expansion to strategic recalibration. While China remains a volume leader, margin pressure, trade friction, and evolving consumer expectations are global challenges.
Carmakers must now prioritise resilience over scale, by rebalancing portfolios, investing in infrastructure, and accelerating innovation. Tesla, BMW, BYD, and VinFast are adapting in different ways, but the race ahead will reward those which build agile, profitable, and future-ready business models.
For more information on how Southeast Asia has emerged as a strategic battleground as Chinese brands accelerate their international expansion, read the report, The Rise of Chinese Brands is Reshaping Southeast Asia’s Consumer Landscape.