BEIJING — Competition for China’s electric car market will continue to heat up in the next two to three years, according BYD, which claimed it wants to work with Tesla to grow the market.

Chinese battery and electric car maker BYD has grown rapidly in recent years, with total vehicle production in 2023 surpassing that of Elon Musk’s Tesla.

Fierce competition in China’s electric car market in the last two years has resulted in the lowest prices for the vehicles globally, Yunfei Li, general manager of branding and public relations at BYD, told reporters Monday.

“I think this is an inevitable process, but it may take another two to three years,” he said in Mandarin, translated by CNBC. “In the end, many brands that aren’t able to compete in the market will be eliminated.”

Battery-only and hybrid powered cars — a category known as new energy vehicles — constituted more than one-third of new passenger cars sold in China last year, according to industry data. Government subsidies and license plate restrictions have helped boost new energy car sales, while startups and traditional automakers have incorporated flashy new tech to attract buyers.

Li said he expected BYD to be one of the few car companies to make money in such an environment, thanks to its involvement in the supply chain and strategy of targeting different consumer price segments with sub-brands.

Most of BYD’s cars are in the mass market category. The company last year launched a high-end brand called Yangwang, whose U8 SUV is selling for more than 1 million yuan ($141,000).

BYD’s premium electric sedan, the Han, sells in a similar price range as Tesla’s cars — above 200,000 yuan ($28,000). In the fourth quarter, BYD sold more battery-powered cars than Tesla.

“Tesla is our very respected industry peer. It is also our client,” Li said Monday.

He pointed out how Tesla has played an important role in the rapid growth of electric cars globally.

“I think this market is very large. It’s not that we must surpass them or they must surpass us. Instead, BYD and Tesla together, or more new energy vehicle brands together, we need to think about how to increase the new energy vehicle ‘cake,'” Li said.

Musk last week on an earnings call confirmed that BYD is a Tesla supplier.

Separately on Monday, BYD said in a filing with the Shenzhen Stock Exchange that profit last year likely rose by at least 74% to a range of 29 billion yuan to 31 billion yuan ($4.09 billion to $4.37 billion).

The Chinese company told reporters it had yet to set a vehicle production target for the year.

Tesla reported gross profit of $17.66 billion in 2023, down 15% from a year ago. China accounts for about 22% of Tesla’s revenue.

BYD makes most of its money in China, but has started to export cars to Europe, South America and other parts of Asia.

The company said Monday it was cooperating with the European Union’s probe into the role of subsidies for Chinese electric car companies. But BYD said it was otherwise pushing ahead with global expansion, including working more with local partners and building factories in other markets.