After dethroning the German giant for the first time earlier this year, BYD notched up 595,300 sales in the three months ended June 30, increasing its market share to 11.2%. VW sold 544,000 vehicles, falling around 1 percentage point behind.

Volkswagen had been the best-selling brand among automakers in China since at least 2008 when data from the China Automotive Technology and Research Center became available.

The trend reflects the declining influence of legacy foreign brands as Chinese EV makers muscle in with increasingly sophisticated — and affordable — models. For instance, BYD earlier this year launched the 73,800 yuan (US$10,300) Seagull electric hatchback, with the 55-kilowatt motor version offering around 300km of range.

In contrast, global automakers such as VW and Toyota Motor Corp have been hampered by a lack of EV offerings. Japan’s Toyota on Tuesday said it had dismissed around 1,000 contracted factory workers in China as the world’s biggest auto market rapidly transitions to clean cars.

Sales of new energy vehicles, which include plug-in hybrids and battery EVs, jumped 25% in June to 736,000 units — accounting for almost two in every five cars sold — China’s Passenger Car Association data showed.