On September 5, NIO announced its financial results for the first half of 2024. During this period, NIO generated revenue of RMB 27.4 billion, a year-on-year increase of 40.6%, with a net loss of RMB 10.2 billion, narrowed by 5% year-on-year.

At this point, the financial reports for the first half of the year from all six domestic listed new energy vehicle (NEV) manufacturers have been released. From a profitability perspective, Li Auto remains the only new force brand to achieve profitability, far ahead of other brands. In fact, WENJIE, another brand, also achieved profitability in the first half of the year. However, as both Thalys and Harmony OS Smart have included WENJIE in their respective statistics, it can be confusing in terms of representation. Therefore, for the purpose of this article, WENJIE will be excluded from our analysis.

With Xiaomi Automobile's deliveries starting in April and Zeekr's U.S. IPO in May, the operating performance and sales of listed NEV manufacturers began to diverge. Zeekr's sales surged 106% year-on-year in the first half, while Xiaomi Automobile's sales in the second quarter approached that of XPeng. NIO Automobiles has also entered a fast lane of growth.

The six automakers performed differently in the first half of the year. Some saw slower growth rates, while others experienced revenue increases without corresponding profit gains. Still, others faced competition from upstarts. Changes in the NEV market are ongoing, and the drama is far from over.

Mixed Fortunes

In terms of sales, Zeekr, NIO, Leapmotor, and Xiaomi emerged as the biggest winners due to significant year-on-year growth. Zeekr delivered 87,870 vehicles in the first six months of the year, a 106.1% increase year-on-year, making it one of the top-performing brands in terms of sales growth. NIO delivered 87,426 vehicles, a 60.2% increase, while Leapmotor delivered 86,696 vehicles, a 94.8% increase. In August alone, Leapmotor delivered over 30,000 vehicles for the first time. Xiaomi Automobile, which began deliveries in the second quarter of this year, delivered 27,307 vehicles, approaching XPeng's quarterly delivery of 30,207 vehicles. XPeng delivered a total of 52,028 vehicles in the first half of the year.

However, the overall revenue picture looks quite different. Despite its impressive sales growth, Leapmotor's revenue performance was somewhat lackluster. In the first half of the year, Leapmotor generated revenue of RMB 8.8 billion, a 52% year-on-year increase, but incurred a net loss of RMB 2.2 billion, slightly narrower than the RMB 2.3 billion loss in the same period last year. Its gross margin turned positive at 1.1%, compared to -5.9% in the same period last year.

Compared to Zeekr and NIO, which had similar sales volumes (both exceeding 80,000 vehicles), Leapmotor's revenue performance lagged significantly. Zeekr generated revenue of RMB 34.8 billion in the first half of the year, a 63% year-on-year increase, with a net loss of RMB 3.8 billion and a gross margin of approximately 14.9%. As of June this year, Zeekr had cash and equivalents of approximately RMB 8 billion. NIO, on the other hand, generated revenue of RMB 27.4 billion, a 40.6% year-on-year increase, but incurred a net loss of RMB 10.2 billion, the highest among the six automakers, with a gross margin of 8%.

Zeekr not only surpassed NIO in revenue but also outperformed it in key indicators such as net loss and gross margin.

Xiaomi Automobile, as a late entrant, has quickly caught up, with deliveries starting in the second quarter and already closing in on XPeng. In terms of revenue, Xiaomi Automobile has surpassed Leapmotor's quarterly revenue of RMB 5.3 billion. Moreover, Xiaomi Automobile's gross margin for its innovative business segment, including smart electric vehicles, was 15.4% in the second quarter of this year, outperforming Leapmotor's relatively low margin.

XPeng, on the other hand, lags behind in all aspects except for its gross margin, which remains stable.

XPeng's financial report for the first half of 2024 revealed revenue of RMB 14.7 billion, a 61.2% year-on-year increase, with a net loss of RMB 2.7 billion, narrowed by nearly half compared to the same period last year (RMB 5.1 billion loss in the first half of 2023). Its gross margin stood at 13.5%, compared to a negative 1.4% in the same period last year.

In terms of revenue, XPeng lags behind Zeekr by almost half, with sales only slightly better than Xiaomi Automobile, which began deliveries in the second quarter.

Overall, all six listed automakers achieved year-on-year growth, but the contrast in strength varied significantly, indicating intense competition among brands. While the ranking for the first half of the year stands, the year-end ranking is likely to be quite different.

Outlook for the Third Quarter

Looking ahead, all brands have expressed optimistic expectations for the future.

Li Auto expects to deliver between 145,000 and 155,000 vehicles in the third quarter, representing a year-on-year increase of 38.0% to 47.5%, or an average monthly sales volume of approximately 50,000 vehicles. Total revenue is expected to range from RMB 39.4 billion to RMB 42.2 billion, up 13.7% to 21.6% year-on-year.

In July and August, Li Auto delivered 51,000 and 48,122 vehicles, respectively, largely in line with expectations, suggesting that achieving the third-quarter target should not be an issue.

Zeekr aims to sell an average of 20,000 vehicles per month in the third quarter and push for 30,000 vehicles in a single month in the fourth quarter, confident in achieving its annual sales target of 230,000 vehicles. Although Zeekr fell short of its monthly targets in July (15,655 vehicles) and August (18,015 vehicles), the performance remains within an acceptable range.

For the third quarter of 2024, NIO provided its strongest-ever quarterly delivery and revenue guidance: deliveries are expected to range from 61,000 to 63,000 vehicles, and revenue is projected to be between RMB 19.11 billion and RMB 19.67 billion. With July sales of 20,498 vehicles and August sales of 20,176 vehicles, NIO is on track to meet its targets based on its current momentum.

During a conference call, William Li, NIO's CEO, expressed confidence that the supply chain for the L60 model is prepared for monthly deliveries of 10,000 vehicles this year, with the goal of reaching 20,000 monthly deliveries next year. Additionally, NIO has commenced construction on its third manufacturing facility, which is scheduled to commence operations in September next year.

Leapmotor's guidance for the third quarter indicates a substantial increase in sales compared to the second quarter, with a projected improvement in gross margin for the second half of the year. Specifically, Leapmotor delivered 22,000 vehicles in July and 30,305 vehicles in August, successfully joining the 30,000-vehicle club. With cumulative deliveries of 53,286 vehicles in the second quarter and an additional 52,421 vehicles in July and August, Leapmotor has already matched its second-quarter performance. If sales can maintain above 30,000 vehicles in September, Leapmotor's third-quarter sales will equal those of the entire first half of the year, marking a significant milestone for the company.

XPeng's third-quarter delivery guidance ranges from 41,000 to 45,000 vehicles, implying monthly sales of 13,000 to 15,000 vehicles. However, with July sales of 11,145 vehicles and August sales of 14,036 vehicles, XPeng faces some pressure to meet its targets.

Due to increased orders and production capacity, Xiaomi Automobile has raised its annual delivery target from 100,000 to 120,000 vehicles. This means that Xiaomi Automobile aims to deliver 92,693 vehicles in the second half of the year, surpassing the first-half deliveries of Zeekr, NIO, and Leapmotor.

Xiaomi Automobile's ambitious goals far exceed industry expectations. It is anticipated that the company's annual revenue could exceed RMB 20 billion.

People's Auto Review

From these listed new energy vehicle manufacturers, we can clearly see the intensity of competition. Whether they are pioneers or latecomers, whether they focus on the high-end market or target mid-to-low-end products, all of them are eyeing market sales as their foundation.

Sales are the cornerstone of a company's existence and the key to generating revenue. Imagine if an automaker cannot sell its cars; it might need to reconsider its positioning, much like Huawei did with its smartphone business.