The strong result came as it extended its lead in the Chinese market, thanks to an expanding range of products that is helping it overtake Volkswagen to become the top-selling brand.

BYD’s large scale would help it maintain strong profit margins despite a price war and the end of EV subsidies, Chairman Wang Chuanfu told reporters in Hong Kong on Wednesday, referring to developments that occurred after the end of the fourth quarter.

The company posted on Tuesday a quarterly profit for October-December of 7.3 billion yuan ($1.06 billion), up from 602 million yuan a year earlier. The gross profit margin for automobiles and related products, which accounted for 77% of BYD’s revenue in 2022, increased to 20.4%, well above the 3.7% margin in 2021.

More than 40 auto brands, including BYD, followed Tesla’s Jan. 6 move to cut prices to defend market shares amid weakening demand. But BYD is among the few winning market share.

Bolstered by its Dynasty and Ocean series of plug-in hybrids and pure electric cars, BYD took overtook Volkswagen in February for the second month in four.

BYD accounted for 41% of so-called new energy car sales in the world’s biggest auto market for the first two months of the year. Tesla, by contrast, had an 8% share.

Wang said he expected the company’s vehicle sales to grow more than 80% in the first quarter, which would outperform the overall market but mark a slower pace compared to BYD’s more than 200% sales increase in 2022.

The Chinese EV giant has been slowing output since the start of the year when Beijing ended a national subsidy programme for EVs and plug-in electric vehicles.

It has reduced shifts at two auto assembly plants in Shenzhen and Xian in China making its top-selling models including the Song and Qin EVs, Reuters reported last week.