Chinese electric vehicle maker BYD (BYDDY) surpassed Tesla (TSLA) to become the world’s top seller of electric vehicles in 2023, demonstrating a remarkable turnaround for a company that was worried about survival just a few years ago.

Yet, BYD executive vice president Stella Li insists there is no gloating to be had.

“We have a high respect for Tesla,” Li said to Yahoo Finance Live (video above). “They’re a market leader. They’ve given a great education to the market. Without them, I think the global EV market could not [advance] so rapidly. I think they are a partner … pushing the whole auto industry to transition to the future electric car.”

BYD edged past Tesla at the end of 2023 after selling more than 3 million cars, with more than 80% of sales in China. The milestone highlighted BYD’s fast track to the top, as the company grew sales by a million cars in each of the last two years.

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That rise coincided with the explosive expansion in China’s EV market. New energy vehicles (NEV), which include plug-in hybrids and battery electric vehicles, accounted for less than 5% of the country’s automobile sales in 2019. Today, that rate has soared to 35.7%, according to data from the China Association of Automobile Manufacturers.

Founded in 1995 as a battery manufacturer for cell phones and other consumer electronics devices, BYD has spearheaded the Chinese EV transition by building a business model reliant on vertical integration. Roughly 75% of the parts and components that go into its vehicles are manufactured in-house, allowing the company to control costs and timelines, according to Li.

Li said BYD operates on an 18-month road map from concept to market, far faster than the years it takes for Western rivals to develop cars.

Government subsidies and tax breaks introduced to kick-start EV adoption have also played a key role in BYD’s expansion, along with that of other Chinese carmakers. At a conference earlier this year, Ford (F) CEO Jim Farley said the Chinese held a “20% to 30%” cost advantage, noting that BYD produced its entry-level Seagull EV for $9,000 to $11,000 in materials.

But Li dismissed BYD’s reputation as a cheap car manufacturer, saying the company has evolved and improved its technology to compete head-to-head with Western rivals on innovation. Its lineup ranges from a $10,000 vehicle to the ultra-luxury Yangwang brand, which recently introduced a sports car that retails for $233,000 in China.

“In China, the message is strong,” Li said. “If you are not investing in electric cars, you are out. You will die. You’ll have no future.”

The Chinese automaker has also gotten backing from Berkshire Hathaway's Warren Buffett, who took a 10% stake in the company in 2008.

BYD has been competing directly with Tesla in its home market since the US carmaker entered China in 2020.

While Tesla CEO Elon Musk initially mocked BYD as a competitor back in 2011, during Tesla’s most recent earnings call, he warned about the global expansion of Chinese EV makers, saying they are “extremely good.”

“Frankly, if there are not trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said.

The US maintains a 27.5% tax on cars made in China and imported into the US.

Li likened the threat of Chinese competition raised by auto executives like Musk to the narratives that followed the entry of Japanese cars into the US market. She added that, despite Tesla’s success in China, Musk’s firm and BYD have “less than a 15%” overlap in buyers.

“Our real competition is the ICE car,” Li said, referring to internal combustion engine vehicles. “The more people jump in to produce EVs or [plug-in hybrids], the better for the industry.”

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