Unternehmen, bei denen der Anteil der neuen Energiequellen über 50 % liegt, haben alle eine Gewinngrowth erzielt.

"Selling new energy vehicles doesn't make money." This view, which has been circulating in the automotive market in the past few years, is it still the case now?

In September, major automakers successively released their first - half financial reports, and their profit situations are now very different from those of previous years.

In the past, new energy vehicles were always questioned for "losing money on every vehicle sold" and "burning money to gain market share". However, judging from the financial report data of the first half of this year, all automakers with a new energy vehicle ratio of over 50% have achieved profit growth without exception.

Among the 15 companies we counted, those with increased net profits are BYD, Seres, Li Auto, XPeng, NIO, Leapmotor, and BAIC BluePark. All of these are new energy vehicle manufacturers.

Another company, Geely, with a new energy vehicle ratio of over 50%, seemingly had a 9% year - on - year decline in profit in the first half. But actually, this is because Geely had more than 7 billion yuan in income from selling equity in 2024. If these parts that have little to do with the main business are deducted, in fact, Geely's net profit from selling cars in the first half of this year increased by 102% year - on - year.

In contrast, those with declining net profits, such as SAIC, Great Wall, and Beijing Automobile (different from BAIC BluePark, mainly including Beijing Benz, Beijing Hyundai, and Beijing Off - Road), are all enterprises still in the exploratory stage of transformation, with fuel vehicles still dominant. Even Dongfeng, GAC, and Jianghuai, which had the most obvious decline in net profit in the first half, have basically the lowest proportion of new energy vehicles among all automakers.

It can be said that after rounds of price wars, the profit margin of fuel vehicles has been squeezed to the limit. Coupled with the decline in sales, fuel vehicles, which used to make money as long as they were sold, are no longer the profit cows of automakers. Instead, new energy vehicle models, with the growth of sales and the emergence of economies of scale, have begun to enter a gradually mature profit - making stage.

Perhaps some people think that the rise of Chinese new energy vehicle manufacturers cannot be separated from policy support. But looking at the global market, multinational giants are also facing the same situation.

In the first half of this year, the sales of fuel vehicles of Volkswagen, Mercedes - Benz, and BMW generally declined, and their profits also dropped significantly by more than 30%. Although this decline is also related to political factors such as tariffs, the impact of the intelligent and electric transformation is still the main reason.

On the other hand, BYD and Geely from China have gradually surpassed established multinational automakers and entered the top ten in global sales. This change also proves that with the continuous increase in the proportion of new energy vehicles, the order and rules established in the fuel vehicle era in the automotive industry are gradually changing.

NO.1

[ Victory of the New Energy Route ]

Looking back two or three years ago, BYD began to quickly capture the market with the lower price of electricity compared to oil. But the mainstream view in the market at that time was still the previously mentioned "selling new energy vehicles doesn't make money" and "exchanging profit for market share is not sustainable".

Until the first half of this year, it not only achieved half - year revenue exceeding Tesla for the first time, becoming a veritable global number one new energy vehicle manufacturer; it is also one of the few enterprises among the world's top ten automakers to achieve positive profit growth.

Although in the second quarter, due to the domestic price war and the increase in the cost of installing high - level intelligent driving systems, BYD's net profit declined, the growth of overseas business still offset the impact of the price war to a certain extent and maintained stable performance.

By the end of the first half of this year, BYD's export volume not only doubled, exceeding 400,000 vehicles for the first time, but also surpassed Chery in terms of ranking, becoming the champion of single - brand export sales among Chinese automakers. In many countries such as Italy, Turkey, Spain, Brazil, and Thailand, it has also become the new energy brand with the highest sales.

The growth of overseas sales drove BYD's overseas revenue to increase by 50% year - on - year to 135.4 billion yuan, and its proportion in total revenue also rose to 36%.

In a word, the benefits brought by economies of scale to BYD are still continuously emerging. The other two companies, Geely and Seres, have also benefited to a certain extent from similar strategies to achieve their current results.

Especially Geely. As early as the initial stage of transformation, some senior Geely executives said bluntly that although they would not sell cars at a loss, they were willing to sacrifice some profits in order to quickly expand market share. Facing BYD, which repeatedly launched price wars to expand market share, Geely has always adopted a follow - up strategy.

The result of this is that although Geely's profit declined year after year in the past few years, since last year, the rise in sales of the Galaxy series has finally enabled its new energy sector to get rid of losses and enter a harvest period of positive development. In terms of both sales and performance momentum, it has become the second only to BYD.

Among the emerging car - making forces with good performance, Leapmotor, which performs the best, is also the most determined implementer of this strategy.

While benchmarking its products against emerging car - making forces, Leapmotor's prices are even more competitive than those of Geely and BYD. The financial report for the first half of this year shows that Leapmotor, which prices close to cost, only makes 100 yuan for each vehicle sold. But in order to seize a larger market, Leapmotor doesn't seem to mind making less profit. A long time ago, Zhu Jiangming, the founder and chairman of Leapmotor, proposed a strategy of prioritizing scale.

First seize the market, and then make money through cost control and economies of scale. By the first half of this year, Leapmotor has finally passed the initial investment stage and become the second emerging car - making force to achieve semi - annual profitability, outperforming many formerly more powerful competitors.

It's no exaggeration to say that almost all automakers with good momentum in the Chinese market today have emerged from the price - cutting competition to seize the market. Even the current achievements of the entire new energy vehicle market are inseparable from competing with fuel vehicles on price.

NO.2

[ The Logic of the Market Has Changed ]

Of course, in the development process of automakers, some have adhered to a different route from BYD. Great Wall is a representative of this.

However, with the increase in the penetration rate of new energy vehicles and the significant decline in the cost of raw materials such as batteries, Great Wall's attitude and strategy towards new energy have also quietly changed.

The most obvious change is reflected in the restart of the ORA brand. Before the middle of this year, as the only pure - electric brand under Great Wall, ORA had not launched new models for several consecutive years, and its channels and teams were also in a shrinking state. It was only in the past few months that ORA has re - released plans for multiple new models.

Previously, ORA executives told the automotive industry media that the most important reason for restarting new models is that the cut - throat competition in the pure - electric market has gradually returned to a normal state. However, some insiders revealed that after being educated by the market, Wei Jianjun, the chairman of Great Wall Motors, has also begun to realize the importance of scale and market share. After all, five years ago, Great Wall had the highest sales among the four major self - owned brands, but five years later, Geely, Chery, and BYD have all doubled their sales, while Great Wall has remained stagnant.

The general environment of the automotive market has quietly changed. Since March, the penetration rate of new energy vehicles has exceeded 50% for six consecutive months, becoming the absolute main force. And fuel vehicles have long passed the stage of easy profit - making. On the one hand, to maintain sales, most fuel vehicles have to cut prices; on the other hand, when sales decline, the once - existing economies of scale no longer work, and some enterprises have started to incur losses.

Take GAC Honda as an example. Due to the continuous decline in sales, its former profit cow has turned into a loss of 410 million yuan in the first half of this year. If it was difficult to make money selling new energy vehicles in the past, now it's not certain that selling fuel vehicles can make money either.

Especially for joint - venture automakers, whether it's fuel vehicles or new energy vehicles, they have lost their previous premium ability. As Wu Xuxi, the executive deputy general manager of the sales branch of Changan Mazda, said, now joint - ventures "can hardly stand on an equal footing with self - owned brands in competition, and prices have to go down". Even BBA brands can hardly avoid this situation.

In fact, even though Ola Källenius, the CEO of Mercedes - Benz, said in an interview that he didn't want to maintain high sales through large - scale promotions, in order to cope with the highly competitive automotive market, BBA brands also have to make compromises.

Take Audi as an example. The transformation models launched this year, whether it's the first new car Q6L e - tron on the PPE platform or the first AUDI model E5 Sportback, have all offered a competitive price.

On the Mercedes - Benz side, the pricing of the new - generation electric models has not been determined yet. However, the pure - electric GLC unveiled at the Munich Auto Show is equipped with rear - wheel steering for the first time, a configuration that was previously only available on S - class models. This kind of configuration downgrade that subverts the previous product logic is undoubtedly another form of price - cutting to seize the market.

It can be said that from the domestic to the international market, the gradually maturing new energy vehicles are subtly changing the original behavioral logic of automakers.

NO.3

[ In Conclusion ]

Data shows that from January to July this year, the profit margin of the domestic automotive industry was 4.6%. Not only is it still lower than the average of 5.9% for downstream industrial enterprises, but it is also still in a downward trend in terms of year - on - year and month - on - month comparisons for single months.

Most automakers still face the pain of profit reduction during the transformation. Fortunately, the upward performance of companies such as BYD, Geely, and Leapmotor still gives people hope for development.

As a late - comer, new energy vehicles will eventually mature in all aspects. The coexistence of multiple energy forms replacing the dominance of fuel vehicles is an irresistible general trend.

This article is from the WeChat public account "AutoReport Automotive Industry Economics", author: Wu Xue. Republished by 36Kr with permission.