BEIJING (Reuters) – Chinese electric vehicle maker BYD on Wednesday reported a 32.8% rise in second-quarter net profit, the fastest growth since the end of 2023, despite weakening spending on expensive products in the world’s largest auto market.

Net profit reached 9.1 billion yuan ($1.3 billion) in the April-June quarter, while sales rose 25.9 percent year-on-year to 176.2 billion yuan, a stock exchange statement said.

For the first half of the year as a whole, net profit rose 24.4 percent to 13.6 billion yuan.

BYD has taken a clear leadership role in the field of electric and plug-in hybrid vehicles, leveraging its strategy of vertical integration by using key components such as batteries from its own production.

BYD has surpassed the combined sales of Volkswagen’s two joint ventures in China by 14.5% in the first seven months. According to estimates by Counterpoint Research, BYD is expected to dethrone Tesla as the largest supplier of electric vehicles this year, with a 17.7% share of the global market, while Tesla has only 17.2%.

The company is offering drastic discounts on its best-selling Dynasty and Ocean series electric cars, securing its leading position with a share of over a third of the Chinese market for alternative drive vehicles.

BYD has also expanded its international presence, including in Europe and Mexico, where it plans to set up production facilities. The company faces an additional 17% tariff on exports of electric vehicles from China to European Union countries.

According to Reuters calculations based on BYD’s monthly data, overseas deliveries accounted for 11.9 percent of BYD’s total car sales in the first seven months of the year, almost double the amount in the same period last year.

(1 US dollar = 7.1252 Chinese renminbi yuan)

(Reporting by Qiaoyi Li, Zhang Yan and Kevin Krolicki; Editing by David Goodman and David Holmes)