Recently, Geely Holding Group released its sales report for July 2024. Total sales for the month were approximately 245,800 vehicles, representing a year-on-year increase of 10%. Among them, new energy vehicle sales reached 110,000, a year-on-year increase of 42%.

It can be seen that Geely Holding Group's new energy vehicle sales have grown significantly, and Geely is striving to catch up with competitors in the new energy vehicle field. In this context, the market has high expectations, and people are wondering whether the former domestic leader can reclaim the "king" throne? Can Zeekr, which has just landed on the US stock market, turn a profit this year?

Strong growth in new energy vehicles

According to the sales report, Geely Holding Group sold a total of 245,752 vehicles in July, a year-on-year increase of 10%. Among them, sales of new energy vehicles reached 110,042, a year-on-year increase of 42%.

From January to July 2024, Geely Holding Group's cumulative sales reached 1,739,467 vehicles, a year-on-year increase of 23%, with cumulative new energy sales of 696,522 vehicles, a year-on-year increase of 48%, and cumulative international sales of 690,478 vehicles, a year-on-year increase of 23%.

Geely Auto Group sold a total of 150,782 vehicles, a year-on-year increase of 13%, with new energy sales of 59,051 vehicles, a year-on-year increase of 58%. Volvo Cars sold 57,447 vehicles globally, a year-on-year increase of 6%, with new energy sales of 27,879 vehicles, a year-on-year increase of 49%. Proton sold 15,103 vehicles, a year-on-year increase of 13%. All brands have shown strong growth momentum.

Geely Holding Group stated that the company has delivered impressive results in the field of new energy vehicles, which reflect the overall growth trend of the new energy vehicle market and the increasing acceptance of new energy vehicles by consumers.

Facing profound industrial changes and new opportunities, Geely Automobile launched an intensive offensive on new energy vehicles in 2023. At the technical level, Geely Automobile launched the newly upgraded Leishen Hybrid series of products and introduced the mid-to-high-end new energy series "Geely Galaxy" based on this technology. This model has sold over 110,000 units in cumulative sales in nine months since its launch, becoming a new driving force for Geely's acceleration towards intelligent new energy transformation. Zeekr also launched two new models last year, with cumulative deliveries increasing by 65% year-on-year.

With sales continuing to grow rapidly, Geely Automobile's operating performance has also improved. In 2023, Geely Automobile achieved revenue of 179.2 billion yuan, a year-on-year increase of 21%, setting a new high; net profit attributable to shareholders was 5.308 billion yuan, a year-on-year increase of 51%.

With steadily improving operating performance, the market has higher expectations for Geely Automobile. Can the former "domestic leader" reclaim the throne?

It may be difficult to reclaim the "domestic number one" position

At the 2023 results announcement, Geely Automobile CEO Gui Shengyue expressed confidence that Geely Automobile would reclaim its position as the top domestic brand. Can Geely really do it?

Judging from Geely's development history, Geely Automobile, founded by Li Shufu, achieved good results in the early stages by adopting a rural-surrounding-urban strategy and occupying the market with low prices. Before 2014, Geely launched brands such as Jinkang and Panda, but due to excessive categories and unclear positioning, the overall brand strength was weak. Subsequently, Geely launched the "three major brands returning to one Geely" strategy, introducing the Emgrand, Boyue, Borui Vision series, and most models became popular after their launch.

In 2017, Geely Automobile's sales soared to 1.248 million vehicles. In the same year, Geely Automobile's share price rose by 342% to a record high of HK$28.29. It was also in this year that Geely's market value surpassed BYD for the first time, becoming the most valuable automaker among the top three domestic brands.

At the same time, Geely was not satisfied with the low-end market, and the company began to upgrade its brand positioning and enter the mid-to-high-end market. In 2017, Geely launched the mid-to-high-end brand Lynk & Co, and in 2018, Geely and Lynk & Co surpassed 1.5 million vehicles in sales, reaching a sales peak.

In 2015, Geely launched the "Blue Geely Action" plan for new energy transformation, aiming to achieve more than 90% of new energy vehicle sales by 2020. However, the results of the "Blue Action" fell far short of Li Shufu's expectations. In 2020, new energy vehicle sales were only 68,000 units, accounting for only about 5% of total sales, far from the 90% target. In the same year, its share price fell to around HK$9, losing two-thirds of its market value from its peak.

It can be seen that Geely made an obvious mistake in formulating its strategy at that time. First, the 90% new energy sales target was too aggressive and did not match the industry environment at that time. Second, the "oil-to-electricity" transition caused consumer confusion about the brand.

In addition, Geely gradually shifted its focus to capital market operations, actively acquiring companies and driving the listing of Volvo, Polestar, Lotus, Zeekr, and other companies. In October 2021, Geely Automobile launched the "Nine Dragon Bay Action" plan, with 150 billion yuan invested in R&D over five years, aiming to achieve full-stack self-research for autonomous driving by 2025 and launch more than 25 new smart new energy products within five years.

Currently, although the "Nine Dragon Bay Action" plan has achieved initial results, it may be too early to judge its success.

Zeekr successfully listed, aiming to turn a profit this year?

Geely Holding CEO An Conghui mentioned at the results presentation that Zeekr's goal for this year is to turn a profit and achieve a successful listing.

Currently, regardless of whether Zeekr can turn a profit, the listing goal has already been achieved. Following NIO, Xpeng, and Li Auto, Zeekr has become the fourth Chinese new energy vehicle company to list on the US stock market.

In May 2024, Geely Holding's Zeekr Intelligent Technology (ZK) was listed on the New York Stock Exchange, becoming the fastest automotive technology company to go public from inception. For comparison, Tesla, Xpeng, Li Auto took 7, 6, and 5 years, respectively, while NIO took 4 years to go public. Zeekr took only 3 years.

However, Zeekr's performance is a significant weakness. From 2021 to 2023, Zeekr's revenue was 6.53 billion yuan, 31.9 billion yuan, and 51.67 billion yuan, respectively; net losses were 4.51 billion yuan, 7.66 billion yuan, and 8.26 billion yuan, respectively. Not only did cumulative losses exceed 20 billion yuan over three years, but the magnitude of losses continued to expand. Judging from the data, it seems difficult to turn a profit this year. Car manufacturing is a bottomless pit, and selling cars at a loss is a hurdle that new forces must overcome.

From a stock price perspective, the market does not seem optimistic about its future development. After going public, Zeekr's share price has fluctuated downward and has been on a downward trend.

Overall, from 2019 to 2022, Geely Automobile experienced four years of continued low sales due to its slow pace of new energy transformation. Li Shufu promptly adjusted his strategy and implemented a series of new energy layouts, finally delivering impressive results in 2023, with sales continuing to increase since the beginning of this year. However, to reclaim the "king" throne, Geely still needs to continue to work hard.