The efficiency potential for single‐junction photovoltaics (PV) is described by the detailed balance model, which requires the elimination of nonradiative recombination and perfect minority carrier collection. Improvements in GaAs, Si, and perovskite PV follow this model. It might be more complex for CdTe, a leading thin‐film PV technology. While lifetime, passivation, and doping goals for 25% efficient CdTe solar cells are largely reached, voltage is ≈20% below the detailed balance limit. Why is that? In Se‐alloyed CdSexTe1‐x (Se is required for >20% efficiency) additional losses can occur due to electrostatic and bandgap fluctuations and due to electronic trap states. To understand mechanisms limiting CdSeTe solar cell performance and to suggest improvements, carrier dynamics, and transport in CdSexTe1‐x with variation in Se composition and as doping is analyzed. It is shown that trapping, likely due to anion‐site defects and their complexes, is correlated with low charge carrier mobility of 0.1–0.6 cm2 (Vs)−1. Even with 1000 ns charge carrier lifetimes, carrier diffusion length is less than the absorber thickness, reducing efficiency to ≈23%. Device simulations are used to analyze the performance of CdSexTe1‐x solar cells; thermodynamic models are not sufficient for absorbers with electronic disorder and trapping.