Seres and Xiaomi's gross profit margins crush those of BBA. Has the business model of Chinese new energy vehicle startups been proven successful?

The domestic new - energy vehicle startups are "going crazy" again! Two Chinese new - energy vehicle startups have directly squeezed into the top five in terms of gross profit margin among global passenger car manufacturers. Who could have believed this result three years ago?

Recently, "ZuoSi Auto Research" released the ranking of the gross profit margins of global passenger car manufacturers in the first half of this year. Among them, Jaguar Land Rover led the way with a gross profit margin of 39.9%. Seres and Xiaomi Auto ranked second and fourth respectively with gross profit margins of 28.9% and 24.9%. Li Auto and Zeekr also made it into the top ten in terms of gross profit margin, surpassing traditional well - known giants such as Toyota, Mercedes - Benz, and Volkswagen Group.

We know that the gross profit margin is one of the important indicators to measure a company's profitability. However, new - energy vehicle startups like Seres and Xiaomi have a history of at most a dozen years, and the shortest ones have only been around for a few years.

How can these "newcomers in the industry" outperform century - old automakers in terms of "money - making ability"? Behind the eye - catching high gross profit margin data, is there any "inflation" due to differences in statistical caliber? As the price war in the new - energy vehicle market intensifies, how long can this wave of high - profit margins last?

These questions not only make "high gross profit margin" a hot - topic keyword in the industry but also push new - energy vehicle startups like Seres and Xiaomi into the spotlight. But before arguing about "whether the data is inflated" and "how long the dividend can last", perhaps we should first clarify a core question: What exactly does a high gross profit margin for automakers mean?

Analyzing two high - margin automakers: How profitable are Seres and Xiaomi?

The gross profit margin = (operating revenue - operating cost) / operating revenue. From the formula itself, a higher gross profit margin seems to mean stronger profitability for a company, but this conclusion does not fully apply to automakers.

For automakers, the gross profit margin is by no means a simple number to measure "how much money is earned". Instead, it reflects the comprehensive result of the company's product competitiveness, cost - control system, and strategic adaptability. Although both domestic new - energy vehicle startups and overseas automotive giants have high gross profit margins, there are obvious differences in the logic behind their formation among different automakers.

Image source: Hongmeng Smart Mobility official

Seres' gross profit margin in the first half of this year reached as high as 28.93%, an increase of about 4.9 percentage points year - on - year, ranking first among domestic automakers. After analyzing Seres' financial report data, DianCheTong found that behind this nearly 30% gross profit margin is the dual - driving effect of "premium on popular high - end models + efficient cost allocation".

Among them, the Wenjie M9 sold 62,500 units in the first half of the year, accounting for 42% of the total sales of Wenjie models, becoming the absolute sales leader. The Wenjie M8 and Wenjie M7 accounted for 24% and 23% of the total sales respectively. It is worth noting that the average transaction price per vehicle of Wenjie models exceeded 400,000 yuan, significantly higher than the price range of mainstream new - energy vehicles in the industry, providing core room for the improvement of Seres' gross profit margin.

Moreover, the optimization of the cost side further magnified the profit elasticity. In the first half of this year, the company's operating cost decreased by 10% year - on - year. Although the operating revenue slightly decreased by 4% to 62.402 billion yuan during the same period, the net profit attributable to the parent company increased by 81.03% against the trend, reaching 2.941 billion yuan. This contrast of "slight decrease in revenue and significant increase in profit" directly confirms the key supporting role of cost reduction in profit growth.

One of the core actions of cost optimization comes from the innovation of the supply - chain model.

According to "The Paper" report, two production lines of CTP2.0 high - end battery packs of CATL in Seres' super factory were officially put into operation, for the first time adopting the "factory - within - a - factory" cooperation model. In essence, this model integrates core component suppliers directly into the vehicle manufacturing factory. From the company issuing instructions to the adjustment of the supplier's production line, it takes less than 20 minutes, which not only reduces logistics costs but also improves production efficiency.

Of course, Seres needs to pay Huawei for technology licensing fees and sales service fees. However, in the view of DianCheTong, this part of the expenditure is not simply a cost burden but forms a "positive linkage" with profit growth.

Image source: Hongmeng Smart Mobility official

On the one hand, the Qiankun Intelligent Driving ADS 4 and Hongmeng Cockpit provided by Huawei are precisely the core competitiveness that enables Wenjie models to support a price of over 400,000 yuan. Without these technological supports, the premium space for high - end models would shrink significantly. On the other hand, the traffic and service capabilities of Huawei's channels have helped Wenjie quickly open up the high - end market.

Xiaomi Auto's ability to achieve a sufficiently high gross profit margin also depends on the sales contribution of high - end models. In the first half of 2025, the Xiaomi YU7 had not yet been delivered. Against this background, relying solely on the continuous efforts of the single Xiaomi SU7 model, the company's operating loss in the automotive business in Q2 was narrowed to 300 million yuan, a significant improvement compared with previous quarters.

The core support for this achievement is the stable sales volume of the SU7 series and the brand premium brought by the SU7 Ultra. The former provides a "bottom - line" for the profit space, while the latter further increases the gross profit per vehicle.

More importantly, Xiaomi Auto's cost advantage comes from its supply - chain system that has been deeply cultivated for many years. The two main models are developed and built on the same platform. Self - developed motor technology, CTB integrated battery technology, super - large die - casting technology, and intelligent cockpit have significantly reduced the dependence on external suppliers and cut many intermediate costs.

Image source: Xiaomi Auto official

Based on this, combined with the growth expectation after the upcoming delivery of the Xiaomi YU7, Xiaomi has clearly stated that it is expected to achieve profitability in the automotive business in the second half of the year.

Comparing Xiaomi and Seres, DianCheTong believes that although both have high gross profit margins, there are essential differences in the core formation logic. This difference is concentrated in two dimensions: the cooperation model and the product strategy, ultimately leading to different profit structures and growth potentials.

Seres highly depends on the "in - depth cooperation" with Huawei. The advantage is that it can quickly obtain high - end technology and traffic, but it needs to pay technology licensing fees and sales service fees, and the profit needs to be shared with the cooperation partner. Xiaomi, on the other hand, "focuses on self - research and supplemented by cooperation". The core technologies are all self - developed, and cooperation is only selected in some non - core links, with higher technology control and profit retention rates.

Seres' higher gross profit margin is mainly due to its richer high - end product line. By diversifying risks and expanding the audience through models at different price points, Xiaomi Auto, for now, breaks through the market with a single popular model, and the cost - reduction effect of platformization has not reached its upper limit.

It is worth noting that although the formation logic is different, the underlying commonality of their high - profit margins is the same, both relying on "high sales volume + low cost".

Up to 13% growth! The gross profit margins of domestic new - energy vehicle startups are rising

If we expand our vision from domestic new - energy vehicle startups to the global automotive market, we will find that the overseas automotive brands with top - ranked gross profit margins seem to follow a completely different logic from Xiaomi and Seres' "high sales volume + low cost".

Jaguar Land Rover led the world with a gross profit margin of 39.9%. However, in the first half of this year, Jaguar Land Rover's global sales volume was 198,699 units, a year - on - year decline of 4.4%. However, the sales proportion of the Range Rover family and the Defender family increased to 75%, among which the sales volume of million - level models increased by 8% year - on - year.

This structure of "shrinking non - profitable models and growing high - profit models" enables Jaguar Land Rover to leverage "more profit contributions" with "less overall sales volume", supporting the continuous high level of the gross profit margin.

Image source: Zeekr official

DianCheTong noticed that the gross profit margins of domestic new - energy vehicle startups showed a significant year - on - year growth trend in the first half of the year: Zeekr increased by 5.1% year - on - year, XPeng by 3.0% year - on - year, and Leapmotor even led with a year - on - year increase of 13.0%.

Behind this data is the continuous improvement of the recognition of domestic new - energy vehicle startups in the market. Specifically, these brands targeting the 200,000 - 500,000 - yuan price range have had an obvious impact on traditional luxury brands. Porsche's gross profit margin decreased by 8.3% year - on - year, Volvo by 5.4%. Even multinational groups such as Mercedes - Benz, BMW, Volkswagen, and Toyota have seen a slight year - on - year decline in gross profit margin of less than 3%.

However, the scope of this impact is limited and has not yet extended to the million - level and above market. The audience in this price range has a much higher demand for brand history and scarcity than for intelligent configurations, building a solid profit moat for traditional luxury brands such as Jaguar Land Rover.

Looking at Tesla, a representative of pure - electric vehicle manufacturers, its gross profit margin trend shows an obvious characteristic of "falling from a high level". As early as 2021, Tesla's gross profit margin exceeded 30%. Although it slightly declined in 2022, it still remained above 25%. However, since 2023, this data has been continuously declining. By the first half of 2025, the gross profit margin further dropped to 16.8%, a year - on - year decrease of 0.9 percentage points, and the overall profit space has shown a significant contraction trend.

Ultimately, Tesla's profit pressure is directly related to the transmission effect of the "price war" in the Chinese market. Since 2023, the Chinese new - energy vehicle market has entered a stage of intense competition. Brands such as Xiaomi, Zeekr, and XPeng have directly diverted Tesla's potential customers, directly leading to a slowdown in its delivery growth rate in China and even globally.

Image source: Tesla official

In order to maintain its market share, Tesla had to adopt the strategy of "trading price for volume". Although it stabilized part of the sales volume in the short term, it directly reduced the gross profit per vehicle, thereby dragging down the continuous decline of the global overall gross profit margin.

In the view of DianCheTong, the profit - making paths of global automakers have shown obvious differentiation: domestic new - energy vehicle startups achieve overtaking on curves through "precise price range + ecological synergy", while overseas brands consolidate their advantages through "technological accumulation + brand premium". However, no matter which path is taken, a high gross profit margin is only a stage result. Only by transforming it into continuous R & D investment and product - iteration ability can an automaker truly maintain its profit high - ground in the long - term competition.

High gross profit margin ≠ profitability! New - energy vehicle startups will ultimately compete on "net profit margin"

In the new - energy vehicle industry, "high gross profit margin" is one of the key points for domestic new - energy vehicle startups to promote. After all, such a high gross profit margin can not only prove the brand's potential to the capital market but also convey the product's competitiveness to consumers, becoming a "knock - on brick" for new - energy vehicle startups to quickly open up the market.

However, there is a gap called "net profit margin" between "high gross profit margin" and "company profitability".

Currently, most new - energy vehicle startup brands are generally in the embarrassing situation of "high gross profit margin but difficult to turn profitable".

Behind Seres' high gross profit margin of 28.9%, it needs to invest in the sharing cost of Huawei's technology cooperation, the channel maintenance cost of high - end models, and the continuous investment in new - platform R & D, making its net profit margin always lower than 5% (the net profit margin in the first half of this year was about 4.71%), and it has not yet reached the break - even point (usually considered to be above 10%).

Leapmotor's gross profit margin in the first half of the year was 14.1%. However, this was the first time the brand achieved positive semi - annual profit with a net profit of 30 million yuan, and the net profit margin was only 0.12%.