The company says it sold 207,734 EVs in December, taking its annual total to 1.76 million, as subsidies and discounts helped attract customers.

It comes as Tesla is due to announce its own quarterly sales figures later on Thursday.

The US electric car maker maintained a slim lead in EV sales over BYD in the previous quarter but the Shenzhen-based firm has been narrowing the gap.

BYD’s total vehicle sales jumped more than 41% in 2024, year-on-year. The surge was powered mainly by sales of its hybrid cars.

The company has benefited from a rise in car sales in its home market, as intense competition drove down prices and government subsidies encouraged consumers to replace their old cars with EVs or other more fuel efficient options.

BYD sells 90% of its cars in China, where its been extending its lead over foreign brands like Volkswagen and Toyota.

The rise of BYD and other Chinese EV makers contrasts with the challenges faced by some legacy car makers, which have been struggling in major Western markets.

Last month, Honda and Nissan confirmed that they were holding merger talks, as the two Japanese firms seek to fight back against competition from the Chinese car industry.

Also in December, Volkswagen announced it had reached a deal with the IG Metall trade union which will avert plant closures in Germany and avoid immediate compulsory redundancies.

The German motor industry giant had previously warned it might have to shutter plants in the country for the first time in a bid to cut costs.

Earlier in the month, the boss of car making giant Stellantis, Carlos Tavares, quit with immediate effect following a boardroom clash.

His abrupt exit from the company – which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler – came two months after Stellantis issued a profit warning.

In the third quarter of 2024, BYD saw its revenues soar, beating Tesla’s for the first time.

It posted more than 200bn yuan ($28.2bn, £21.8bn) in revenues between July and September – a 24% jump from the same period last year, and more than Elon Musk’s company whose quarterly revenue was $25.2bn.

However, Tesla still sold more electric vehicle (EVs) than BYD.

Chinese car makers have been trying to boost sales of their EVs outside the country but have faced pushback in some major markets.

In October, European Union tariffs of up to 45.3% on imports of Chinese-made EVs came into force across the bloc.

The US has also imposed a 100% duty on EVs from China and President-elect Donald Trump is expected to impose further tariffs on imports.

Meanwhile, BYD has been expanding its foothold in emerging economies.

Last month, it faced a setback in Brazil – its largest overseas market – with authorities halting the construction of a BYD factory, saying workers lived in conditions comparable to “slavery”.

BYD said it had cut ties with the construction firm involved and remained committed to a “full compliance with Brazilian legislation”.

More than 160 workers have been rescued in Brazil’s northeastern state of Bahia, according to a statement from the Public Labour Prosecutor’s Office (MPT).

They were allegedly put in a “degrading” environment and had their passports and salaries withheld by a building company.

BYD said in a statement that it had cut ties with the firm involved and remained committed to a “full compliance with Brazilian legislation”.

The factory was scheduled to be operational by March 2025, and was set to be BYD’s first EV plant outside of Asia.

The workers, hired by Jinjiang Construction Brazil, lived in four facilities in Camaçari city.

At one such facility, workers were made to sleep on beds without mattresses, according to prosecutors.

Each bathroom was also shared among 31 workers, forcing them to get up extremely early in order to be ready for work.

“The conditions found in the lodgings revealed an alarming picture of precariousness and degradation,” the MPT said.

“Slavery-like conditions”, as defined by Brazilian law, include debt bondage and work that violates human dignity.

The MPT added that the situation also constitutes “forced labour”, as many workers had their wages withheld and faced excessive costs for terminating their contracts.

BYD said affected workers had been moved to hotels.

It added that it had conducted a “detailed review” of the working and living conditions for subcontracted employees, and asked on “several occasions” for the construction firm to make improvements.

BYD, short for Build Your Dreams, is one of the world’s largest EV makers.

It sold more electric vehicles than Elon Musk’s Tesla in the last three months of 2023, as the two battled for top spot in the sector.

The company has also been expanding its foothold in Brazil, which is its largest overseas market by a wide margin.

It first opened a factory in São Paulo in 2015, producing chassis for electric buses.

Last year, it announced that it would invest 3 billion reais ($484.2m) in Brazil to build an EV manufacturing plant.

EV sales in China have been boosted by government subsidies. which encourage consumers to trade their petrol-powered cars for EVs or hybrids.

But there is a growing backlash abroad against what some see as the Chinese government’s unfair support for domestic car makers.

Major markets like the US and EU have placed tariffs on EVs from China, with more tariffs expected during the incoming administration of US president-elect Donald Trump.