BYD is the world's second-largest maker of electric vehicles after Tesla, and is number one in China's vibrant but fiercely competitive domestic sector.
On Thursday it hit back at allegations that two of its hybrid car models were "suspected of violating standards for evaporative pollutants", after a complaint to China's environment ministry by rival Great Wall Motors was published by state-backed news outlet The Paper.
Evaporative pollutants refer to gasoline vapour from fuel tanks and are a source of harmful air pollution.
"Our products and related testing comply with national standards and have been certified by authoritative national institutions," BYD said in a statement.
"We welcome relevant departments to come any time for an investigation, to collect evidence and conduct testing."
It added pointedly that "the testing vehicles were purchased, stored, and arranged for inspection by Great Wall Motors", instead of a third party as required under national rules.
Analysts say China is leading the way worldwide when it comes to electric vehicle development.
BYD saw its profits jump fivefold in the first quarter thanks to global demand for its cars and buses.
But competition within the domestic market is fierce, with around 100 brands offering more than 300 models, according to Counterpoint Research.
The complaint by Great Wall, which was filed last month according to The Paper, comes weeks before China's tough new vehicle emissions standards kick in.
BYD and Great Wall did not reply to AFP's request for comment, and the environment ministry did not reply to queries on whether it was investigating the complaint.
BYD, whose investors include US investment titan Warren Buffet, was embroiled in another pollution accusation earlier this month.
An environmental inspection team visited one of the company's biggest factories in the central Chinese city of Changsha to inspect "gas emissions", according to a brief statement by the city government published on May 8.
Dozens of children living near the factory had suffered from nose bleeds and nausea, and their parents had noticed a "pungent smell" coming from the factory, Chinese news outlet Phoenix Tech reported.
The Changsha government has not published its findings after the inspection and BYD declined to comment on the issue.
China's upgraded vehicle emissions standards will take effect nationwide from July 1.
In a major upgrade to current rules, the new standards require vehicle owners to take the tests while driving on the road instead of at a testing centre.
prw/reb/dan
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