Leapmotor, which has the strongest momentum, didn't get the "ticket".

After a decade of car manufacturing, new - force players have gone through round after round of brutal competition. Now, the "survivors" are few and far between. As we enter 2025, all of them are facing the "big test of profitability". Whether it's Li Auto and Leapmotor, which have already achieved profitability, or NIO and XPeng, which are striving for profitability in the fourth quarter, no one dares to say that they have secured a ticket for the next stage.

It's Time to Make a Profit

In just a decade, the new - force camp has undergone multiple rounds of reshuffling. From more than sixty companies at its peak, only four - NIO, XPeng, Li Auto, and Leapmotor - can now be considered competitive. Among them, Li Auto and Leapmotor have achieved profitability (Leapmotor achieved semi - annual profitability). The remaining two, NIO and XPeng, regard the fourth quarter of this year as a crucial time node for profitability. After all, if the losses continue, it will be difficult to maintain high - level R & D investment and cover various costs, and consumer confidence in the market will also be greatly affected.

In 2025, it's a must for new - force carmakers to turn a profit.

In September, the four new - force carmakers - NIO, XPeng, Li Auto, and Leapmotor - successively released their mid - year financial reports for 2025. From an overall performance perspective, the revenues of all four companies generally increased, but there were obvious differences in terms of profitability.

Li Auto remains the most profitable one. In the first half of the year, its net profit was 1.74 billion yuan, a 3% year - on - year increase. Its revenue was 56.17 billion yuan, a slight 1.99% year - on - year decrease. The reason for the lack of significant profit growth is the increased R & D investment during the product replacement period, including large - scale expenditures on battery technology, intelligent driving, and new model development, which will inevitably impact profits in the short term.

Comparison of revenues and deliveries of NIO, XPeng, Li Auto, and Leapmotor in the first half of 2025. Photo / MeiRen Auto

Leapmotor has become the biggest dark horse this year. Not only did it top the new - force semi - annual sales list with 221,700 vehicle deliveries, but it also achieved a net profit of 30 million yuan, becoming the second new - force carmaker to turn a profit after Li Auto. Its revenue reached 24.25 billion yuan, a staggering 174% year - on - year increase. The gross profit margin also rose from 1.1% in the same period last year to 14.1%. This is due to the surge in vehicle and spare - parts sales, as well as non - automotive businesses (such as carbon credits and technology licensing).

Leapmotor's ability to outperform in this stage mainly stems from the cost advantages brought by its full - scale self - research and supply - chain integration. It can produce core components on its own and cooperate with suppliers to produce some parts, reducing its external dependence. The benefit is a significant reduction in the cost per vehicle. Coupled with the high - value - for - money strategies of models like the C11 and C16, it has captured a large market share at half the price of its peers.

XPeng has also performed impressively. In the first half of the year, XPeng delivered 197,000 vehicles, exceeding the total for the whole of last year. Its revenue was 34.09 billion yuan, a 132.5% year - on - year increase, and the loss was narrowed to 1.14 billion yuan. He Xiaopeng, the chairman of XPeng Motors, said in an earnings call that "in the second quarter of 2025, the company's sales, revenue, gross profit margin, and available cash all reached record highs." Behind this is the rapid increase in sales of new models like the MONA M03 and the commercialization of intelligent driving technology.

Comparison of profits and R & D expenses of NIO, XPeng, Li Auto, and Leapmotor in the first half of 2025. Photo / MeiRen Auto

NIO is still tightening its belt. In the first half of the year, its revenue was 31.04 billion yuan, a 13.49% year - on - year increase, and it delivered 114,000 vehicles. However, the net loss was as high as 11.745 billion yuan. To save money, NIO saved 436 million yuan through organizational optimization in the second quarter and cut R & D, administrative, and sales expenses to maintain a gross profit margin of 10%.

The Novice Protection Period Is Over

However, whether a company is profitable or not is just a stage result. The four new - force carmakers are each facing different difficulties.

Li Auto, which has achieved profitability by precisely targeting family users and using extended - range technology, is now being chased by its competitors. Wenjie, Voyah, and other brands have launched similar family - oriented SUVs. Leapmotor has even openly played the "half - price Li Auto" card. In the extended - range market where Li Auto excels, there are more and more competitors.

Li Auto is looking for new growth engines and has successively launched two pure - electric models, the MEGA and the i8, in the pure - electric market. So far, the i8 has not replicated the immediate success of the L9/L8 when they were launched. However, Li Auto quickly adjusted. Seven days after the i8's launch, it changed the configuration of the refrigerator, VLA large - model, etc. from "optional" to "standard" and unified the price at 339,800 yuan.

Li Auto i8. Photo / Li Auto official

Although Leapmotor seems to have achieved consecutive quarterly profits, a closer look at the financial report reveals that its profitability mainly relies on non - recurring income. The financial report shows that non - automotive income, including strategic cooperation, carbon - credit trading, and government subsidies, totaled nearly 1.1 billion yuan. This income specifically comes from Leapmotor's technology licensing to Stellantis Group and FAW and carbon - credit sales to Stellantis Group. However, Leapmotor still had an operating loss of about 90 million yuan. This data reflects whether a company's "core business is profitable" and is one of the most crucial indicators for judging a company's core profitability. In other words, if one excludes one - time income, Leapmotor's core business has not yet achieved profitability.

Looking at Leapmotor's core business, it mainly competes in the market with extremely high cost - effectiveness. For example, models like the B10 have brought down the entry - level price of lidar - equipped cars to around 120,000 yuan. This strategy has brought in sales and market share but has also lowered the revenue per vehicle and the gross profit margin. The financial report shows that Leapmotor's gross profit margin in the second quarter of 2025 was 13.61%, a sequential decline of about 1.3 percentage points from 14.9% in the first quarter.

Cost control is almost at its limit. There may not be much room for further cost reduction in the future. Moreover, relying on price cuts for sales in the long term may create a "cheap" brand image in consumers' minds, making it more difficult to enter the mid - to - high - end market later.

XPeng, which also follows a cost - effective strategy, has continuously improved its automotive gross profit margin, reaching 14.3% in the second quarter of this year, a 7.9 - percentage - point year - on - year increase. This is due to the revenue from its technical cooperation with Volkswagen. The technical service revenue reached 2.83 billion yuan, with a gross profit margin of 60.1%, exceeding the gross profit level of the vehicle business. However, this kind of external cooperation cannot guarantee continuity, and this income cannot be included in recurring earnings.

However, XPeng is in a slightly better position than Leapmotor, as its brand image is not overly associated with being cheap. The XPeng G7, which targets the mid - end market, has performed well since its launch. On August 13th, XPeng announced that this model had delivered over 10,000 vehicles within 40 days of its launch. The Ultra version, which has the highest price, is more popular. Nick, the person in charge of XPeng's P/G series products, is confident that "the XPeng G7 Ultra can account for 60% of the total orders."

XPeng G7. Photo / XPeng official

What makes new players uneasy is that the benefits of the novice protection period are about to disappear. According to the latest policy, starting from January 1, 2026, the full exemption from purchase tax for new - energy vehicles will be replaced by a 50% reduction, and the maximum reduction amount will not exceed 15,000 yuan. This policy adjustment will undoubtedly increase consumers' car - buying costs, which may prompt price - sensitive consumers to re - evaluate the cost - effectiveness between new - energy vehicles and fuel - powered vehicles. When the policy benefits fade away, the focus of market competition will shift to product strength, cost - control ability, and the overall systematic ability of carmakers.

Meanwhile, the question of whether the automotive industry is still a lucrative business is also being re - examined. Data from the National Bureau of Statistics shows that the overall profit margin of the automotive industry has declined from 7.8% in 2017 to 4.3% in 2024. By July 2025, according to data released by Cui Dongshu, the secretary - general of the China Passenger Car Association, the profit margin of the automotive industry was only 3.5%. New - force carmakers have limited resources, which further exacerbates their survival difficulties.

Securing the Ticket

He Xiaopeng, the chairman of XPeng Motors, once mentioned in a conversation with Luo Yonghao that even when considering traditional carmakers with rich car - manufacturing experience, no one has firmly secured the "ticket" at present. In the upcoming survival battle, how can the four new - force carmakers break through?

Li Auto is pinning its hopes on pure - electric products. Its third pure - electric model, the i6, will be launched in September. Li Xiang, the founder and CEO of Li Auto, has publicly set a goal that the i6 should become "the most competitive product in the mid - to - large - sized 5 - seat pure - electric SUV segment" and has set a monthly sales target of 9,000 - 10,000 vehicles.

Li Auto i6. Photo / Li Auto official

To achieve this goal, Li Auto has adjusted its sales system, reorganizing its five major sales regions into 23 regions directly managed by the headquarters to improve operational efficiency. At the same time, Li Auto still has a cash reserve of hundreds of billions of yuan, providing a buffer space to resolve crises.

XPeng plans to "recover" with low - priced models and then truly "generate blood" through mid - to - high - end products, promoting the transformation of its product structure towards high - end. It expects to achieve profitability in the fourth quarter.

More new models are on the way. After the launch of the new P7, He Xiaopeng revealed that XPeng is preparing new models to compete in the next three to four years. 2026 will be XPeng's real product - rich year. "Next year, there will be so many new products that it will 'exceed everyone's imagination'. From 100,000 to 2 million yuan, there will be a more diverse product matrix, including full - size SUVs."

NIO is coping with survival challenges through multiple cost - reduction and efficiency - improvement measures. For example, it has implemented a CBU (Cell Business Unit) operating mechanism from top to bottom, instilling a cost - awareness in every department. Cost reduction through technology is also starting to pay off. By using its self - developed Shenji chip instead of purchasing externally, it can save about 10,000 yuan per vehicle. Coupled with the hot sales of the high - margin models, the LeDao L90 and the new NIO ES8, NIO is confident about achieving profitability in the fourth quarter.

Leapmotor plans to find new growth points through technology licensing and overseas markets, and expand the external supply of components. For example, the LEAP 3.5 architecture may be supplied externally in a "black - box" manner. Zhu Jiangming, the chairman of Leapmotor, believes that selling one million vehicles annually within three years is the company's "safety line". In 2024, Leapmotor delivered 294,000 vehicles, and in the first half of this year, it delivered 222,000 vehicles. Although Leapmotor's growth rate has far exceeded the market average from last year to this year's first half, this is also due to its relatively small base. Achieving annual sales of one million vehicles will be a daunting task.