Introduction

As a senior, one should possess the magnanimity and vision of a predecessor

When Geely Automobile's CEO Gui Shengyue raised a pointed view at the Q3 2025 earnings call, stating that while new forces in the automotive industry have been around for some time, few are profitable and those that fail to achieve profitability next year may struggle to survive, it quickly sparked a discussion in the media sphere about automotive qualifications and market influence.

It is worth noting that this is not Geely's first public critique of new forces. At the Q2 2024 earnings conference, its executives had already stated that the financing-dependent model of new forces was unsustainable. With a 16-month gap between the two statements, both directly addressed the survival status of new forces and once again reflected the ideological clash between traditional automakers and emerging forces.

Against the grand backdrop of China's new energy vehicle (NEV) industry development, is this cautious and somewhat harsh judgment from a predecessor towards its successors comprehensive and fair?

Dispersing the fog of emotions and examining the growth logic and industry value of new forces, we may find that for China's new energy market to thrive, it requires not only the competitive principle of survival of the fittest but also a sense of empathy derived from historical experience and a grand vision for the future.

Veterans should not rely solely on old account books

Undeniably, Geely's Q3 2025 performance was impressive. With 761,000 vehicles sold, a 43% year-on-year increase; revenue of RMB 89.192 billion, up 27% year-on-year; and net profit of RMB 3.82 billion, a significant 59% year-on-year increase. Its Zeekr Tech delivered 140,200 vehicles, with NEVs accounting for 72.4% of sales, and its comprehensive gross margin rose to 19.2%. The process of business integration with Geely is also nearing completion.

Behind these figures lies Geely's decades-long accumulation of a supply chain system, cost control capabilities, and a distribution network. As a representative of successful transformation from the fuel vehicle era, Geely's automotive heritage is indeed unparalleled by most new forces.

However, for Geely as a whole, the profit contribution from its new energy segment remains relatively thin. Brands like Galaxy and Zeekr are making efforts, but in the face of new forces' consumer-side offensive, their market presence still lags behind the leading players.

Before 2019, the core markets of traditional automakers like Geely and BAIC were concentrated in the B-end (business-to-business) mobility sector, with vehicles sold directly to leasing companies. This production-driven sales model provided stability but also caused them to miss the window of opportunity to capture consumer-side mindshare.

In contrast, the growth logic of new forces differs fundamentally from that of traditional automakers. They are not just building cars but redefining them—from user experience to business models, from technological pathways to organizational structures, all imbued with the DNA of the internet era.

Before 2019, China's NEV market was primarily B-end driven. Vehicles were mainly supplied to mobility companies, and consumers perceived NEVs as inexpensive commuting tools. It was new forces like NIO and XPeng that, with their user-centric approach, truly Pry in (brought into) the consumer-side market. NIO's battery swap service and XPeng's intelligent experience essentially made consumers willing to pay out of pocket for NEVs.

Today, in terms of profitability, new forces have formed a clear hierarchy. Data shows that Leapmotor achieved a net profit of RMB 150 million in Q3 2025, marking two consecutive quarters of profitability; Seres (AITO) reported a net profit of RMB 2.37 billion in the same period, with high-end models accounting for over 76% of sales; Li Auto maintained a net profit of RMB 1.97 billion despite a sales decline; while Xiaomi Automobile achieved a net profit attributable to shareholders of RMB 710 million in just its first year of delivery, setting a record for the fastest profitability among new forces.

The profitability logic of these newcomers is precisely what traditional automakers need to re-examine. Leapmotor's technological inclusivity, relying on over 65% self-researched components and large-scale production, has brought lidar-equipped intelligent driving models down to the RMB 120,000 price range while expanding its second growth curve through overseas markets, exporting 17,400 vehicles in Q3 and achieving profitability through high-volume, low-margin sales. Seres's premium pricing, supported by a high proportion of models priced above RMB 350,000 like the M9 and M8, props up profits with per-unit gross margins while generating new revenue streams by supplying range extenders to 12 companies. Xiaomi's ecological synergy, leveraging Xiaomi Group's RMB 150 billion cash reserves and user ecosystem, converts smartphone and AIoT users into car owners while rapidly reducing costs through supply chain integration, achieving profitability within two years of delivery.

More importantly, the losses incurred by new forces are often strategic investments. XPeng reported a net loss of RMB 380 million in Q3 but invested over RMB 2 billion in R&D, with its Turin chip receiving a fixed point (design win) from Volkswagen. NIO, while still reducing losses, has deployed over 3,000 battery swap stations, creating a unique user barrier. These investments may not immediately translate into profits but are building competitive advantages that traditional automakers find difficult to replicate.

This path of investing first and reaping rewards later is one that Geely itself has traversed. In 2010, Geely acquired Volvo Cars for USD 1.8 billion, facing short-term pressures but achieving technological leapfrogging in return. Today's new forces are merely exploring another growth path aligned with their own DNA.

The automotive industry is inherently capital-intensive, technology-intensive, and has a long return cycle. Looking back at Geely itself, according to media reports, it took 13 years from entering the automotive industry in 1997 to achieve its first annual profitability in 2010; BYD, which entered the automotive business in 2003, stabilized its profitability only in 2016, also taking 13 years.

As of Q3 2025, among the leading new forces, NIO has been operating for only 11 years, while XPeng and Li Auto have been operating for 11 and 10 years, respectively, still within the growth cycle dictated by industry regularity (laws). Profitability alone cannot be simply used as the sole criterion for measuring their survival capabilities.

Waves of consolidation are inevitable, but the eliminated may not be new forces

Gui Shengyue's prediction of a wave of consolidation in the automotive market next year is not unfounded. October 2025 sales data already shows that Leapmotor led the new forces with 70,200 vehicles sold, while Seres, XPeng, and Xiaomi secured positions above 40,000 units. In contrast, Li Auto saw a 38.2% year-on-year decline, and some second-tier new forces targeting the low-end market sold fewer than 1,000 units per month, with tightening capital chains.

However, the logic of this consolidation is not based on profitability but on adaptability to the new energy era. Traditional automakers excel in manufacturing but lag in user engagement. Geely's distribution network still relies heavily on dealers, whereas new forces' direct sales systems enable direct user reach and rapid product iteration. Geely's intelligence still depends on external collaborations, while XPeng and Huawei have achieved full coverage of urban NOA (Navigate on Autopilot) in their intelligent driving systems.

New forces' weaknesses lie in manufacturing, but their strengths lie in innovation. Leapmotor compensates for its manufacturing shortcoming (weaknesses) with full-domain self-research, while Xiaomi uses supply chain integration to address production capacity gaps. In contrast, the user-centric thinking that traditional automakers need to acquire requires fundamental organizational and cultural transformations.

From a holistic perspective of China's new energy industry, the value of new forces extends far beyond the number of vehicles they produce. They are the key drivers in shifting the industry from B-end dominance to consumer-side awakening. The year 2019 marked a turning point for consumer-side awakening in China's domestic new energy market, a transformation directly linked to the explorations of new forces. According to incomplete statistics, in 2018, the B-end share of domestic NEV sales reached 65%, while the consumer-side share was only 12%. By 2025, the B-end share had dropped to 22%, and the consumer-side share had risen to 48%, with new forces contributing 35% of the incremental consumer-side users.

Consumer perceptions of NEVs have also undergone a fundamental shift due to new forces. Data shows that in 2018, the average budget for domestic NEV purchases was only RMB 128,000, with 'inexpensive commuting' being the most frequently mentioned keyword. By 2025, the average budget had risen to RMB 215,000, with 'intelligent experience' and 'mobility ecosystem' mentioned in 75% and 62% of cases, respectively. NIO's battery swap service maintains a user satisfaction rate above 92%, driving its consumer-side orders to consistently account for over 95% of total sales. XPeng's intelligent cockpit sees users spending an average of 4.2 hours daily, nearly tripling the 1.4-hour average of traditional automakers' intelligent systems in 2018—these experiential innovations truly make consumers willing to pay for NEVs.

In reality, veterans and newcomers are no longer adversarial. Geely and Baidu jointly established Jidu Automobile in 2021. According to incomplete statistics, Jidu sold 12,000 vehicles in Q3 2025, falling short of its annual target but achieving a fault rate of only 0.8 incidents per 1,000 vehicles for its intelligent driving system, which combines Baidu's algorithms with Geely's manufacturing prowess—a 27% reduction compared to Baidu's standalone system. Volkswagen procured XPeng's SEPA 2.0 Fuyao platform and Turin chip, while FAW explored capital cooperation with Leapmotor. Clearly, competition in the new energy era is not about who eliminates whom but about who can faster (more rapidly) integrate each other's strengths.

When Geely grew from a private automaker into an industry leader, it too experienced being underestimated by joint-venture brands. Today's new forces are merely following the path of innovation that Geely once took. More importantly, Leapmotor's cost control, Seres's user operations, and XPeng's technological self-research are all unique strengths of new forces. By integrating the heavy-asset advantages of traditional automakers with the light-asset innovation of new forces—for example, Geely's Zeekr brand is already draw on, learn from, reference (drawing on) the direct sales model and user community approaches of new forces—Geely can address its consumer-side shortcoming (weaknesses), while new forces can accelerate their breakthroughs in manufacturing bottlenecks.

China's new energy goal is global leadership, which requires a thriving ecosystem rather than dominance by a single player. Projections indicate that global NEV sales are expected to reach 28 million units in 2025, with Chinese brands capturing a 35% global market share and international brands like Tesla and Volkswagen accounting for a combined 28%.

Traditional automakers contribute 62% of Chinese brand sales, while new forces contribute 38%. Together, they have driven China's NEV exports from 560,000 units in 2019 to 4.8 million units in 2025, accounting for 32% of global NEV exports. Clearly, China's new energy competitors are not each other but global automotive giants.

When Geely's Galaxy Light concept car incorporates integrated light language and stealth lidar, and when Zeekr Tech's Q3 delivery volume exceeds 140,000 units, it proves that traditional automakers and new forces are inherently symbiotic in the new energy era.

When veterans learn to embrace newcomers and newcomers respect the technological heritage of veterans, China's new energy sector can truly transition from scale leadership to strength leadership—this is the best protection for independent automotive manufacturing.