SHANGHAI, Aug 24 (Reuters) - Chinese carmaker BYD Co Ltd , backed by U.S. billionaire Warren Buffett, posted a 15.5 percent drop in first-half net profit on Sunday as sluggish sales of gasoline cars offset a surge in its electric vehicle business.

BYD and other Chinese carmakers such as Geely Automobile Holdings Ltd and Chery Automobile Co Ltd are losing market share to foreign rivals Volkswagen AG , General Motors Co and Ford Motor Corp as competition grows in the lower-end of China's auto market.

Net profit during the first six months of the year fell to 360.7 million yuan ($58.64 million) from 426.9 million yuan a year earlier, dragged down by a 27 percent fall in vehicle sales volume, BYD said in a statement to the Shenzhen Stock Exchange.

However, BYD's revenue from new energy vehicles, which include electric or plug-in hybrid cars and buses, surged more than 10-fold to 2.7 billion yuan, helped by a slew of government incentive policies to encourage the use of green vehicles.

BYD said in the filing that 2014 "is a key year for the development of new energy vehicles" and that it would look to "grasp this huge opportunity and promote the use of new energy vehicles both home and abroad".

BYD raised HK$4.2 billion ($542 million) in May through a share placement in Hong Kong to fund mainly its electric vehicle business. The carmaker currently has around a 37 percent share of China's new energy vehicle market, and said it expects to further strengthen its position in the second half of the year with new models and expanded production capacity.

BYD's Hong Kong-lised shares fell 3.91 percent to HK$49.2 in Hong Kong trading at the close on Friday, ahead of the earnings announcement. The benchmark Hang Seng rose 0.47 percent.

BYD's shares are up 29.5 percent this year, ahead of the benchmark up 7.8 percent.

(1 US dollar = 6.1510 Chinese yuan) (1 US dollar = 7.7495 Hong Kong dollar) (Reporting by Samuel Shen and Adam Jourdan; Editing by Adam Jourdan)