The rise of the electric car is in full swing, we have no doubt. Little by little, they are gaining ground against the combustion ones, and it has also opened new possibilities to other players who want their piece of the cake. The Chinese auto industry is making its way exponentially into this new electrified era, and we need only look at the dizzying car sales reported by some Chinese manufacturers.
That’s assuming you can think these companies can’t be wrong. However, except for BYD, none of them are profitable. Often regarded as the leaders of the wave of Chinese electric vehicles, Xpeng, Li Auto, and Nio have each increased their respective presences not only in China but also around the world. In fact, Xpeng’s deliveries rose 98% (to 34,422 vehicles) in the second quarter, while Li Auto’s rose 63% (28,687) and Nio’s 14% (25,059 units).
That sounds like good news, right? Well, the financial figures released by the three brands reveal that the net loss has been high. Xpeng ‘s soared 126% to 2.7 billion yuan (386 million euros) in the second quarter, while Nio‘s surged 370% to 2.8 billion yuan (400 million euros). Similarly, Li Auto‘s net loss peaked at 641 million yuan (92 million euros), an increase of 172%. These are the numbers cited by Automotive News.
And it’s a similar story for other domestic giants like Changan Automobile Co. and GAC Motor Co. The former reported a net loss of 1.5 billion yuan (214 million euros) in the first half of the year. Its subdivision, Avatar EV, also reported a loss of 252 million yuan (36 million euros). As for GAC and its secondary Aion EV, their annual net loss is close to 1.4 billion yuan (200 million euros), even though sales have been increasing almost every day.
Against the trend is BYD. The Warren Buffett -the backed automaker is China’s biggest electric vehicle maker, selling 641,350 vehicles in the first half of the year. Needless to say, BYD is also the second largest electric vehicle battery maker in its homeland and its profit recently rose 206% to 3.6 billion yuan (514 million euros) in the first six months of this year.