Chinese carmaker BYD dethroned Tesla in the fourth quarter as the world's best-selling electric vehicle maker as a result of the growing demand for emission-free mobility in China, which is globally the largest vehicle market.

Tesla said on Tuesday that it delivered a record 484,500 electric vehicles in the last three months of 2023, which were roughly 40,000 less than those sold by Chinese company BYD.

This is the first time that BYD outsold Tesla in terms of battery-only vehicle sales on a quarterly basis. For the whole of 2023, Tesla still sold more, standing at 1.81 million units, while BYD sold 1.57 million electric vehicles, up 73 percent year-on-year.

BYD's rise to global fame is a symbol of China's growing competitive edge in the new energy vehicle sector. The nation started fostering the sector in 2009, when most other countries deemed it too early to do so.

The early mover advantage, coupled with favorable government policies and growing charging facilities, has seen China become the world's largest NEV market and one of the most important sources of innovation in the sector.

Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said, "The fast growth of the new energy vehicle sector and the rise of local Chinese marques are helping boost the automotive sector's overall development."

The association, which is scheduled to release collated figures in mid-January, said that NEV sales in China were expected to hit 9 million units in 2023. In the first 11 months, NEV deliveries in the country totaled 8.3 million units, up 36.7 percent year-on-year, it said.

The NEVs accounted for 30.8 percent of vehicle sales during the same period, indicating that Chinese car buyers are more inclined toward emission-free mobility. The figure is expected to rise to 40 percent this year, according to the China Passenger Car Association.

The NEV sales boom has prompted many technology companies to make forays into automobile manufacturing.

Huawei said on Monday that orders for its Aito M9, an SUV codeveloped with Chinese carmaker Seres, surpassed 30,000 in seven days since its launch. The model's mass deliveries are set to begin in February.

Chinese smartphone maker Xiaomi unveiled its first vehicle in late December, a sedan with dimensions similar to BMW's 5 Series.

Xiaomi said the model, which is expected to hit the market early this year, outperforms Porsche's electric vehicle Taycan and Tesla's Model S in aspects such as acceleration and mileage on one charge.

International carmakers are making most of their presence in China.

Grace Tao, vice-president of Tesla, said that almost 100 percent of its Shanghai plant's workforce are Chinese, and 95 percent of components are locally purchased.

Tesla's Shanghai plant produced around 600,000 Model 3s and Model Ys last year for the Chinese market, accounting for roughly one-third of its total global deliveries.

Volkswagen has built a state-of-the-art hub that involves electric vehicle development and production in Hefei, Anhui province. It has also partnered with Chinese technology companies, including Horizon Robotics, to develop autonomous driving solutions and smart cabin functions for its models to be sold in China.

In late December, the German carmaker started to ship electric vehicles made in Hefei back to Europe, which is one of the major destinations for China's vehicle exports.

Statistics from the automobile manufacturers' association show that 1.09 million China-made NEVs were exported in the first 11 months of 2023, up 83.5 percent year-on-year. The number drove China's total vehicle exports to 4.41 million units in the same period, catapulting the nation to the top rank globally.