Chinese corporate giant BYD said on Monday it had sold three million Battery-powered cars in 2023, the most yet, capping a turbulent year for China’s electric vehicle industry.

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

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

In total, Chinese automakers are expected to have sold about 9.4 million electric and hybrid vehicles last year, up 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 automotive market, China is now also the fastest growing, advancing the electric vehicle transition that is revolutionizing the global industry. China rules the supply chain for battery-powered cars, from mining and processing cobalt and other minerals used in batteries to deploying robots in factories that make cars and trucks. China’s electric vehicle companies and their suppliers employ around 1.5 million people.

A major reason for China’s initial leadership in electric vehicles was the government’s strong financial support for the industry’s development. After financial incentives for consumers expired at the end of 2022, automakers reduced car prices to attract buyers. Many companies, including BYD, introduced another round of cuts this fall, intensifying the price war that began earlier this year.

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

Last year’s price reduction was initiated 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 to report a big jump in its global sales this week after cutting prices late last year and as customers took advantage of U.S. tax breaks. Founded in 2003, Tesla is on track 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 vie for the position of world’s most prolific all-electric vehicle maker, both companies face increasing competition from traditional automakers that are spending billions of dollars playing catch-up.

“I think an industry shakeup is an inevitable trend,” said Cui Dongshu, secretary-general of the China Passenger Car Association, which represents the country’s domestic industry. “But it is still unclear who will occupy the future long-term leadership position.”

As sales of electric vehicles rise in China, companies are pouring money into factories and research, often boosted by loans from state banks and assistance from municipalities. Nio, one of the best-selling Chinese electric vehicle brands, said in November that it had laid off 10 percent of its employees.

Over the past year, Tesla has lost market share to rivals such as 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.

In December it announced it would build an assembly plant in Hungary, its first battery-powered car production facility in Europe. In Germany, home of European car manufacturing, it introduced three electric car models in early 2023. BYD has opened dealerships in Germany, Norway and Sweden.

As global competition for electric vehicles has become more intense, the political ramifications have intensified. U.S. authorities have made it difficult for foreign companies to partner with U.S. companies.

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

However, the European automotive industry cannot ignore China as a customer and trading partner.

bmwwhich 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, northeast China.

Volkswagen, which views China as its largest sales market, is moving more of its manufacturing and supply chain 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 with reports.