BYD Overtakes Tesla as the Most Innovative Automotive Manufacturer

KatadataOTO – Electric cars from China continue to proliferate in the automotive markets of various countries. Recently, the results of the IMD FRI (Future Readiness Indicator) Automotive 2025 research showed the dominance of Chinese brands in the top ten rankings.

It should be noted that the study and indicators from IMD measure the future readiness and resilience of automotive companies in the world.

This year, amidst the onslaught of Chinese products, Tesla, which has held the top spot as the most innovative manufacturer since 2019, was pushed to second place after being overtaken by BYD.

Currently, BYD is in first place with a total score of 100. Meanwhile, Tesla follows in second place with a score of 98.1.

Photo : KatadataOTO

The two brands behind Tesla, namely Geely and Li Auto, are in pursuit. Their scores are 82 and 56.1.

Another Chinese brand, Xpeng, is in eighth position, collecting a score of 48.3. 

“Meanwhile, VW and Stellantis have not been agile enough in anticipating changes in the global automotive industry,” said Howard Yu, Professor of Management and Innovation and Director of the IMD Center for Future Readiness, in an official broadcast, quoted Tuesday (27/05).

Various other brands such as Hyundai, Ford, General Motors, Toyota, and Mercedes-Benz are said to be falling further behind.

Yu highlighted BYD's aggressive large-scale expansion of technology and factories.

“Meanwhile, Li Auto, Geely, and Xpeng are growing very rapidly, thus putting great pressure on the competitive landscape of the automotive industry,” continued Yu.

He further explained that there is a difference in the way Chinese manufacturers develop electric cars that makes them superior to other players.

For example, prioritizing car design based on software development and digital integration. Whereas other brands still focus only on the hardware side.

As a result of software development, many Chinese brands do not need to issue recalls if they want to make certain repairs or vehicle calibrations.

A number of settings, from suspension to security features, can be done through software updates.

Not only paying attention to the product, Chinese brands also monitor and secure their supply and distribution chains digitally. So the process can be carried out with precision and transparency.

Photo : KatadataOTO

“Although they require advanced components like batteries and semiconductors, they benefit from a more flexible supply chain. Meanwhile, the complexity of the supply chain for traditional car manufacturers is more complicated,” said Yu.

For a more complete list, here are the top 10 most innovative automotive manufacturers according to IMD FRI 2025, complete with their scores.

1. BYD (100)
2. Tesla (98.1)
3. Geely (82)
4. Li Auto (56.1)
5. Kia (49.3)
6. Volkswagen (48.8)
7. Toyota (48.7)
8. Xpeng (48.3)
9. General Motors (47.2)
10. Ford (43.1