Tesla's (TSLA 3.17%) rise to the top of the electric vehicle (EV) industry was nothing short of spectacular. But there is a new top dog in the industry. And it's making Warren Buffett and his conglomerate company Berkshire Hathaway (BRK.A 0.58%) look like savants yet again when they invested in this company back in 2008.

The automaker is BYD (BYDDY 0.62%) -- short for Build Your Dreams. It was founded in 1995 and, despite a long history of building gasoline-powered cars, the company announced this April that it will be changing to only EV production. 

So far it looks like the move has paid off. At the beginning of the month, a company filing with the Hong Kong Stock Exchange shed light on just how well production was in the first half of 2022. The numbers showed that BYD sold roughly 641,000 cars in the first six months of 2022. This came in as the most electric car sales by any company in the world; the next closest was Tesla at 564,000.

While Tesla struggled with COVID-19 related lockdowns at its Giga Shanghai factory in the spring, which likely damaged production, the feat of out-producing Tesla is nothing short of astonishing. But, production numbers aside, there are some other factors which helped make Warren Buffett and Berkshire Hathaway's original $232 million stake in the company turn into roughly $7.5 billion today. 

BYD's competitive edge

BYD has a competitive edge over many others in one key area of EVs -- battery production. Instead of having to wait on other companies to supply batteries, BYD builds its own. In today's world of supply chain issues, any chance to streamline production is of extreme value. Surprisingly, the company even reached an agreement in June to supply Tesla with batteries.

In addition to its battery production, BYD beats Tesla in another area -- prices. Nearly every one of BYD's models come in at a lower price point. Although there are some trade-offs with these lower prices, like less power and shorter battery ranges, BYD caters to a different demographic than Tesla's more upscale customer base. BYD's most popular EV, the Qin, starts at only $28,000. Conversely, Tesla's cheapest model comes in at nearly $50,000.

Likely what is most impressive about BYD is that they build more than just electric vehicles. In addition to passenger EVs, BYD produces a coach bus, school bus, trash trucks, tandem trucks, battery-storage centers, solar panels, forklifts, and even trains. Its diversified business model gives BYD an edge over almost any other competitor. As more economies set goals for cleaner energy, we should expect BYD to grab market share in other sectors outside of just consumer EVs. 

And that is exactly what is happening. BYD has been busy selling its electric transit buses to municipalities outside of Asia. Just this year, BYD reached agreements with U.S. cities in Washington, Louisiana, California, and cities in Scotland to supply local communities with their all-electric buses.

The future of BYD

Arguably, the most exciting news comes from Japan. Just this month, BYD reached an agreement to release three models in the country starting in 2023. Japan has considerable profit potential due to the country's native automakers, like Toyota and Nissan, not fully embracing the EV movement until the last few years.

Even better, BYD has its sights set on more than just Asia. Its reach into Europe and North America is just in its infancy. But as BYD develops its presence outside of Asia, entry into new markets should further bolster profits as economies around the world transition to net-zero emissions. If BYD can continue on its current trajectory, the company has the potential to surmount itself as a major player not only in electric vehicles but multiple industries related to clean energy.