BYD is to invest $894 million in a plant that produces essential parts for electric vehicles

The state-run Securities Times newspaper said on Monday that Chinese electric car manufacturer BYD has inked a deal to construct a new energy vehicle core components facility with a total investment of 6.5 billion yuan ($894.2 million).

The publication, citing local television, said that the project will significantly increase the production capacity of BYD’s facility in the southern city of Shenzhen.

In the second quarter of this year, BYD sold 426,039 electric vehicles, a 21% increase in sales.

This is nearly 18,000 fewer vehicles than Tesla’s vehicle deliveries in the second quarter, but much less than the difference of more than 86,000 in the previous quarter.

Tesla’s Q2 deliveries fell 4.8%, less than expected, to 443,956 vehicles, but it was still the first time the U.S. firm recorded two consecutive quarters of declines as it grapples with stiff competition in China and sluggish demand due to a lack of affordable new models.