SINGAPORE, July 24 (Reuters) - China's BYD

widened its sales lead over Tesla in Singapore in the

first half of this year, government data showed, highlighting

the challenge facing the world's biggest electric vehicle maker

by sales from Chinese rivals.

BYD's strong growth in Singapore, one of the region's

smallest auto markets, underscores the Chinese firm's ambition

to dominate the Southeast Asia market, where gasoline car brands

from Japan and South Korea are popular and Tesla has yet to

establish a big presence.

The Chinese firm has had already had early success in the

region, claiming Thailand as its biggest overseas market as it

expands distribution partnerships with local conglomerates.

Tesla on Tuesday reported its lowest profit margin in more

than five years and missed Wall Street earnings targets in the

second quarter, hurt by mounting price competition from rivals

amid a sharp slowdown in global EV demand.

By contrast, BYD posted a 21% rise in second-quarter sales

and continues its aggressive expansion outside of China,

including opening its first stores in Vietnam this week, where

Tesla has yet to start vehicle sales.

BYD has also ramped up its marketing efforts in Singapore, a

small, wealthy island with a population of 5.9 million and where

vehicle taxes are among the highest in the world. It opened two

restaurants where consumers can dine on dishes inspired by its

car models and book a test drive.

BYD's EV sales in Singapore jumped 83% in the first half

of this year from the entire 2023 level to 2,587 units, while

second-ranked Tesla sold just 28 more cars during the period

than last year, putting 969 Teslas on the roads.

There is little price difference between BYD and Tesla in

Singapore, where car owners must buy a certificate that costs

about S$100,000 ($74,000).

Singapore wants to stop the purchase of combustion-engine

cars from 2030. EV sales in the city state accounted for around

one third of total vehicle sales in the first half of this year.

In broader Southeast Asia market, Tesla saw its market share

fall to 4% in the first quarter of this year from 6% a year

earlier, even as the overall EV market grew by 37% during the

same period, according to the latest data from research firm

Counterpoint.

($1 = 1.3454 Singapore dollars)