BYD Co. is rapidly closing in on Tesla Inc. as the world’s biggest seller of pure electric vehicles (EVs), with surging profits underscoring its sales clout despite intensifying competition at home.

Traders have snapped up bullish options on BYD, while analysts have raised their earnings projections for the Chinese company to a record high since its preliminary quarterly report this month.

BYD posted all-time high sales despite intensifying competition and a broader slowdown in sales of China’s new-energy cars.

Tesla’s Elon Musk cast a pall over the global EV sector with a grim outlook earlier this month, saying rising interest rates in the United States have hurt the U.S. carmaker’s sales.

Tesla’s results are also suffering from the months-long price war that it had initiated in an attempt to fuel demand.

Analysts have been lowering their earnings-per-share estimates for the U.S. firm at the same time the outlook for BYD has been rising.

“BYD still looks like the safest bet versus Tesla in the short term given its discipline in terms of balancing volume growth with profitability,” said Kevin Net, head of Asian equities at Tocqueville Finance.

“It also has growing exposure to hybrids, which have been gaining market share in China and contribute to higher margins.”

BYD sold a record total of 822,094 vehicles in the latest quarter, including hybrids, helping to cement its lead as China’s best-selling car brand.

What particularly surprised industry observers is that BYD seems to be making more money per vehicle, despite price competition.

Profit per car, excluding the impact of the company’s electronics unit, rose as much as 46% versus the previous quarter, JPMorgan estimates show.

The analysts believe BYD can maintain its profitability into next year thanks to more sales of high-end vehicles as well as continued overseas expansion.

BYD is expected to start deliveries of its high-end Yangwang U8 and Fang Cheng Bao BAO 5 in the fourth quarter, according to pundits at HSBC Holdings.

Outside of China, BYD claims high shares in countries including Brazil, though tax and political considerations have kept it from entering the U.S. passenger-car market. (SD-Agencies)