Analysts attribute much of BYD's success to its cost-cutting efforts: During its initial stages of growth, it stripped back the manufacturing process of cars to rely on cheap manual labor as much as possible, rather than capital-intensive machines.

A recent teardown by investment bank UBS of BYD's Seal -- a pure electric sedan that is the Chinese maker's closest peer to Tesla's Model 3 -- revealed that 75% of the components were made in-house.

BYD remains competitive because its high vertical integration model cannot be easily copied by other Chinese automakers, said Wu Hui, deputy dean of China Yiwei Institute of Economics, a think tank focused on EVs.

In written comments to Nikkei Asia, BYD said its success is a result of the company's "long term investment in technology and unwavering commitment to new energy vehicles in the past two decades," as well as its self-production of core components that ensures its "strong risk resistance capabilities."

At the Las Vegas CES early this year, Carlos Tavares, CEO of Stellantis, the Euro-American car conglomerate, said it cost European automakers 40% more to build an EV in Europe versus Chinese carmakers in China.

"Chinese makers, including BYD, are putting out new cars at a fast pace, and we can't catch up," an employee at a Japanese automaker's product planning division, who asked not to be named, told Nikkei.

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