Move over Tesla (TSLA -1.11%) -- there's a new king of electric vehicles.

BYD (BYDDY 4.08%) produced more fully electric vehicles last quarter than Tesla. The leading U.S. EV maker faced a production bottleneck this summer as it shut down plants to refresh its Model 3 for Europe and China, leading to lower production. And while it still ended up outselling BYD by about 3,000 vehicles, the Chinese automaker is poised to fully take the crown in the fourth quarter and beyond.

Investors interested in electric car stocks should take a pass on Tesla shares. BYD is the stock to buy in October. Here's why.

BYD is an increasingly dominant force in the biggest market

China is the world's biggest market for electric vehicles, and it's growing fast. BYD, though, is growing even faster.

Sales of "new energy vehicles" in China increased 44.1%, according to the China Association of Automobile Manufacturers. BYD's sales of fully electric vehicles during that period grew about twice as fast. In other words, BYD is taking market share.

BYD is the leading EV maker in the leading market. Tesla is in second place, but it's growing slower.

And while there are a lot of smaller EV makers vying for their spot in China's large and rapidly growing market, BYD is proving itself a tough king to unseat. It benefits from strong vertical integration, starting as a battery company. Up to 75% of a BYD vehicle's parts are produced in-house, depending on the model. As an EV battery maker, BYD is able to keep costs low and allows for strong operational leverage.

That advantage allows BYD to compete on price. China has seen a lot of automakers slash prices this year, and BYD has managed to follow the crowd. Despite price cuts, the company produced a 139% increase in profits through the first half of the year, far outpacing its strong revenue growth.

Tesla continued the price wars in China in August, slashing prices for both the revamped Model Y and Model 3. That makes BYD's September sales performance all the more impressive.

BYD sees big opportunities in international markets

BYD's next step is international expansion. Its goal is to double the export sales of all its vehicles to 400,000 next year. Exports accounted for just 9% of BYD's total vehicle sales in the third quarter, according to Bloomberg. That's up from just 5% in the second quarter, but there's still a lot of room to grow.

BYD's cars could face some figurative roadblocks on its path. European officials are investigating Chinese subsidies for electric vehicles that may put European manufacturers at a disadvantage. Meanwhile, U.S.-China relations aren't exactly on the best of terms.

To that end, BYD is focused on commercial vehicles, where it sees fewer hurdles. It sees the opportunity to get its foot in the door in the key European and American markets with its technology in vehicles like trucks before expanding to passenger vehicles.

If BYD can crack those markets over the next few years, it'll propel sales of its EVs higher and make it a serious threat to Tesla.

BYD's stock is priced right

The biggest reason BYD is the EV stock to buy right now is because it's priced right.

Shares trade for less than 18 times analysts' consensus earnings for 2024. By comparison, Tesla shares trade for nearly 58 times next year's earnings.

Despite its strong growth potential and ability to produce operating leverage as its EV sales scale, BYD is trading at a lower multiple than the S&P 500. Investors who want in on the electric vehicle trend should think about adding BYD's American Depository Receipts (ADRs) to their portfolio.