For the first time, Tesla's quarterly sales were surpassed by BYD, a Chinese electric vehicle manufacturer.

• On Wednesday, BYD reported revenue for the three months ended Sept. 30 of 20.12 billion yuan ($28.24 billion), which was a 24% increase from the previous year.
• Tesla's revenue for the same period was exceeded by that amount.
• Amid intense competition in China's auto market and higher tariffs on Chinese EV imports into the EU, a milestone is achieved.

For the first time, the third-quarter revenue of a Chinese electric vehicle maker surpassed that of its behemoth rival.

On Wednesday, BYD reported revenue of 20.12 billion yuan ($28.24 billion) for the three months ended Sept. 30, 2021, which is a 24% increase from the previous year. This surpassed Tesla's revenue of $25.18 billion reported for the same period.

Despite the EV downtrend in mainland China, Beijing-based EV giant sold a record number of passenger vehicles in August.

While Tesla's vehicles are battery-only, BYD's sales are mostly hybrid vehicles.

But in terms of net profit, Tesla still took the lead.

In the third quarter, the American car manufacturer recorded a net profit of $2.18 billion, representing a 16.2% increase from the previous year. Meanwhile, its Chinese counterpart, BYD, experienced a 11.5% rise in profit to 11.6 billion yuan during the same period.

Despite BYD's roughly $70.53 billion total revenue, Tesla still leads in year-to-date sales with $71.98 billion.

In China, the world's largest automotive market, BYD is a leading EV maker, facing competition from both domestic and global rivals for market dominance.

In China, Tesla's Model Y is one of BYD's toughest competitors, with the Seagull following closely behind as the second best-selling battery-powered electric car in September, according to Autohome.

Despite China's disapproval, the competition is likely to become more cut-throat with the implementation of European Union tariffs this week.

The EU declared on Wednesday that it would impose tariff hikes on Chinese EVs, with duties reaching up to 45.3%.

Electric vehicles imported into the US will face extra tariffs ranging from 7.8% to 35.3%, in addition to a 10% standard import duty.

Despite the reduction of tariffs on BYD and Tesla, both companies have increased their production in Europe to avoid the duties.

Earlier this month, Reuters reported that Tesla received approval to increase the capacity of its Berlin plant.

Last year, BYD announced it would establish a presence in Hungary. In July, the Chinese automaker revealed it would invest $1 billion into a plant in Turkey, which has a customs union with the EU.

— CNBC's Evelyn Cheng contributed to this report.