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The Chinese corporate giant BYD said Monday that it sold three million battery-powered cars in 2023, its most ever, capping a turbulent year for China’s electric vehicle industry.

Even as sales surged, heavy competition and a sustained price war took a financial toll on many automakers.

But BYD last year sold 1.6 million fully electric vehicles and another 1.4 million hybrids, which are powered by both batteries and gasoline. Together that is a 62 percent increase over 2022. BYD is also making money, tripling its profit to $1.5 billion in the first half of last year.

All told, Chinese automakers are expected to have sold about 9.4 million electric vehicles and hybrids last year, an increase from 6.9 million in 2022, according to the China Association of Automobile Manufacturers. The group said it expected sales in 2024 to rise again, to 11.5 million.

Already the world’s largest automobile market, China is now also its fastest growing, racing ahead in the electric vehicle transition that is upending the global industry. China rules the supply chain for battery-powered cars — from the mining and processing of cobalt and other minerals used in batteries, to the deployment of robots in factories that make cars and trucks. China’s electric vehicle companies and their suppliers employ some 1.5 million people.

A big reason for China’s early lead in electric vehicles was the government’s heavy financial support for the industry’s development. After financial incentives for consumers expired at the end of 2022, automakers slashed car prices to lure buyers. Many companies including BYD introduced another round of cuts this fall, intensifying the price war that started earlier this year.

In November, BYD advertised discounts on five models of up to 18,000 renminbi ($2,550). Another Chinese electric vehicle company, Ji Yue, a partnership of Geely and Baidu, slashed the price of all versions of its first model by RMB 30,000 ($4,200) in November.

Last year’s price cutting was started by Tesla, the American automaker that has a factory in Shanghai. In January 2023 it lowered prices in China for the second time in three months, and others followed.

Tesla is expected this week to report a big jump in its worldwide sales after slashing prices at the end of last year, and as customers took advantage of U.S. tax breaks. Founded in 2003, Tesla is on a path to sell about 1.8 million battery powered vehicles for the year, up from 1.3 million in 2022. It makes about half of all electric vehicles sold in the United States.

As Tesla and BYD rival for the spot as the world’s most prolific maker of fully electric vehicles, both companies face increasing competition from legacy automakers that are spending billions of dollars to catch up.

“I think an industry shakeout is an inevitable trend,” said Cui Dongshu, the secretary general of the China Passenger Car Association, which represents the country’s domestic industry. “But it’s still uncertain who will seize the future leading position in the long term.”

As fast as China’s electric vehicle sales are rising, companies are pouring money into factories and research, often fueled by loans from state-owned banks and assistance from municipalities. Nio, a top selling Chinese EV brand, said in November that it laid off 10 percent of its employees.

During the last year, Tesla has lost market share to rivals like General Motors, Hyundai, Ford Motor and Volkswagen as they introduced more electric vehicles.

BYD, which faces prohibitively high tariffs in the U.S. market, sells most of its cars in China but is expanding globally, particularly in Europe.

It announced in December that it would build an assembly plant in Hungary, its first production facility for battery-powered cars in Europe. In Germany, the seat of European auto making, it introduced three models of electric cars at the start of 2023. BYD has opened dealerships in Germany, Norway and Sweden.

As global competition for electric vehicles has gotten more intense, the political ramifications have been heightened. United States policymakers have made it harder for foreign companies to partner with American companies.

And in Europe, lawmakers are investigating China’s state subsidies, a step that could lead to tariffs imposed by the European Union.

Yet Europe’s auto industry can’t ignore China as a customer and business partner.

BMW, which has more than 30,000 employees in China, announced last spring that it would invest about $1.4 billion in battery assembly capacity at its factory in Shenyang in China’s northeast.

Volkswagen, which counts China as its largest sales market, is moving more of its supply chain and manufacturing to China. The German giant is hiring thousands of Chinese engineers to design electric cars at its industrial complex in Hefei, a city in central China.

Keith Bradsher, Melissa Eddy and Jack Ewing contributed reporting.

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