In China’s red-hot EV market, it’s tough at the top.

Tesla rival BYD announced on Sunday that its global sales in October were down 12% from the same period a year earlier, marking the second consecutive monthly decline.

It’s the latest sign that the Chinese EV juggernaut is facing a bumpy ride after years of explosive growth, as it faces increasingly fierce competition from domestic rivals.

In earnings last week, BYD said that profits had fallen by around a third year-over-year, and the company’s stock price has plunged around 36% since it hit a record in May.

BYD has soared to the summit of China’s booming EV market and overtaken Tesla as the world’s largest seller of electrified vehicles, thanks to its lineup of affordable and technologically advanced models.

It’s now facing more pressure from Chinese EV startups Xpeng, Nio, and Leapmotor, which all reported record monthly sales in October. Auto conglomerate Geely also smashed delivery records last month.

Geely has been boosted by the success of its low-cost Galaxy brand, including the Xingyuan, a $9,250 compact EV that competes directly with BYD’s ultra-cheap Seagull. Geely, which also owns European brands Polestar and Volvo, has sold just over a million Galaxy vehicles in China so far this year.

BYD also faces competition from Apple rival-turned EV maker Xiaomi, which continues to see strong sales after launching its second vehicle earlier this year, as well as Tesla.

The US automaker sold 71,000 vehicles in China in September, only slightly below the same period last year, and has managed to broadly fend off a wave of new challengers to its best-selling Model Y SUV.

BYD looks beyond China

Outside China, things look a lot rosier for BYD.

The company’s overseas sales rose 169% last month, and Citi analyst Jeff Chung estimated that BYD will export just under 1 million EVs in total this year.

The US market is effectively closed to Chinese automakers due to regulatory restrictions and high tariffs, but BYD has seen sales surge in Europe and even outsold Tesla in the European Union in August.

BYD is betting that overseas expansion will help it ride out the storm back home, with construction on factories in Hungary and Turkey underway and ambitious plans to build 1,000 new stores in Europe next year.

In a note published on October 16, Morgan Stanley analysts led by Tim Hsiao wrote that overseas sales could be a “growth driver” that compensates for BYD’s stalling domestic momentum, adding they expected vehicle sales outside China to be more profitable.

In an interview with Bloomberg in August, Stella Li, BYD’s executive vice president, said the company wants around half of its sales to come from outside China in the future.

Auto executives have long warned that China’s EV industry is not sustainable, with over 100 companies fighting it out for customers and the Chinese government cracking down on excessive discounting.

In a separate interview last month, Li warned that the industry would soon face a consolidation bloodbath, predicting that fewer than 20 carmakers would remain.