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Chinese car giant BYD has seen profits fall as it is hit by slowing demand for electric vehicles (EV) and a price war in the world's largest car market.

The firm said it made $630m (£502m) in the first three months of the year, more than 47% lower than the previous quarter.

BYD has been competing with Elon Musk's Tesla to be the world's biggest seller of EVs. The US giant reclaimed the title earlier this month after losing out to its Chinese rival at the end of last year.

BYD says it sold just over 300,000 battery-only cars in the first three months of the year, down from a record 526,000 in the final quarter of 2023.

The Shenzhen-based firm's latest financial results suggest it may be performing better than Tesla, which posted its first quarterly revenue fall since the pandemic disrupted its production and sales in 2020.

BYD and its rivals have been involved in a price war in China, as they compete for market share at a time of slower economic growth.

The company, which is backed by veteran US investor Warren Buffett’s Berkshire Hathaway, has cut prices on some of its latest models as it tries to attract buyers who have been more cautious when it comes to big ticket items such as cars.

To cushion the blow of softer demand in China, BYD has also been looking to expand into new markets.

The EV maker exported 240,000 cars in 2023 and is looking to grow that number significantly this year.

Its aggressive push into overseas markets has sparked a backlash in the US and Europe, where governments are looking to protect their domestic car makers.

Along with its efforts to increase exports, BYD has also been diversifying its product range by offering higher-end models.

At the Beijing auto show, which opened to the general public this week, BYD has been displaying its latest luxury vehicles.