BYD, China’s biggest electric vehicle manufacturer, produced record Q1 sales of 286,329 electric and hybrid vehicles. In Q2, the company is set to overtake Tesla as the largest EV manufacturer by sales.

BYD’s total EV sales reached 106,042 for the month of April, the second consecutive month of >100,000 sales. Year-on-year monthly sales growth is currently in excess of 300%. The vertically integrated battery and EV carmaker has weathered the rising costs of key materials such as lithium better than most. It has also passed on some of those cost increases to the customer through price rises that so far don’t appear to have dented demand.

In contrast, Tesla, the world’s largest EV manufacturer, is looking set to suffer from recent production shutdowns at the Shanghai production facility resulting from recent COVID-19 lock-downs. The overall outlook for EV sales, particularly in China, looks challenging in the short term if the strict pandemic restrictions continue to impact economic growth. However, BYD’s China-based production costs have allowed it to scale capacity more quickly, which along with a move into higher-end, higher-priced brands, look set to produce a new leader in the EV space.