Chinese brands have topped this year’s Future Readiness Indicator ranking, with Tesla finally missing out on the top spot to BYD.

BYD has seen strong growth in the electric vehicle (EV) segment, fuelled by innovation, and has been expanding to new global markets, expanding its reach beyond domestic Chinese sales.

The research was conducted by the Institute for Managed Development, and looks into how brands are preparing for the future, battling uncertainty, and managing their supply chains.

Tesla is losing ground, with fear of tariffs, and controversies surrounding CEO Elon Musk causing some scepticism.

The IMD found that some Western consumers are still not convinced about the safety and quality of Chinese cars.

Despite this, Tesla took the number two spot, followed by Chinese giant and Volvo parent company Geely, then Li Auto, which currently does not sell cars in the UK.

Legacy brands Kia, Volkswagen, and Toyota followed behind; with Mercedes-Benz, Stellantis, and Nissan not making the top 10.

Professor Howard Yu from the IMD said: “In an age of unpredictable trade wars and shifting tariffs, successful automakers must win on three fronts: software and EV capabilities—which are now basic hygiene factors; diversified market reach and production bases; and a strong cash-to-debt ratio.

“For the first time in automotive history, BYD has surpassed Tesla to become the most future-ready carmaker. But the race is far from over.”