In terms of sales, Chery Group sold a total of 820,785 vehicles from January to April 2025, marking a 15.3% year-on-year increase. It exported 343,203 vehicles, maintaining its position as China's top auto exporter, and sold 224,629 new energy vehicles, a whopping 140.7% year-on-year growth. (Auto sales data in this article are sourced from Chery Auto's official sales bulletin.) Additionally, Chery's decision to go public in Hong Kong underscores its new ambitions amidst the evolving automotive industry landscape. The domestic automotive industry today is characterized by two key themes: new energy and overseas expansion. While Chery has consistently ranked first in passenger vehicle exports, it has been slower in transitioning to new energy. In the fiercely competitive market, even in its stronghold of auto exports, facing the rapid rise of new energy automakers like BYD, Chery cannot afford to rest on its laurels. By listing in Hong Kong, the company aims to bolster its international profile and diversify its financing channels, focusing on leveraging strengths and addressing weaknesses. However, it is reported that no foreign banks will participate in Chery's current Hong Kong IPO. The involvement of top investment banks such as Goldman Sachs and Morgan Stanley is often seen as a testament to a company's global capabilities. Although choosing Chinese investment banks may reflect mutual considerations, it adds a layer of uncertainty to Chery's broader globalization aspirations. Will 2025 be the year Chery fulfills its dreams? The market eagerly awaits its answer.

01 IPO Considerations

On the surface, the funds raised from Chery's IPO will primarily be used for new energy vehicle R&D and overseas market expansion. Behind this direct financing objective lies the company's new challenges in the evolving automotive industry landscape. On one hand, the growth rate of its overseas business, once a significant moat, is showing signs of slowdown, approaching a growth ceiling. According to the company's sales bulletin, in April 2025, Chery exported 88,000 vehicles, a 1.83% year-on-year decline. From January to April 2025, Chery exported a total of 343,000 vehicles, increasing by just 0.1% year-on-year, a near stagnation compared to the 34.2% year-on-year growth in the same period last year. Meanwhile, as its overseas growth slows, many domestic automakers are accelerating their overseas expansion, encroaching on Chery's territory. Many automakers have made going overseas a key strategy. For example, Changan Automobile, with its slogan "No overseas, no Changan," and SAIC Motor Group, which unveiled its overseas strategy 3.0 – the "Glocal Strategy" at the 2025 Shanghai Auto Show, planning to launch 17 new overseas models covering SUVs, sedans, MPVs, and pickup trucks over the next three years.

Additionally, BYD, a representative of new energy automakers, has set a target of around 800,000 overseas sales in 2025. During its over 20-year journey seeking to go public, Chery has been the champion of Chinese brand passenger vehicle exports. Historically, the company's overseas achievements seem unrelated to its listing status. However, with many strong competitors now vying for the top spot, going public in Hong Kong can be seen as a strategic move to consolidate its export position using an international label, aiming to break through the growth ceiling. On the other hand, financing to accelerate the new energy transition is also a key consideration for Chery. Amidst a capital market where new energy vehicles command a significantly higher valuation premium than traditional fuel vehicles, telling a compelling new energy story has become paramount. While Chery has many new energy models, few can be considered blockbusters. iCAR, Chery Auto's first new energy vehicle brand, once carried high hopes for the new energy transition but failed to ignite market enthusiasm upon launch, even facing public scrutiny. The two Zhijie models launched in collaboration with Huawei are also less competitive than Huawei's Wenjie brand.

Despite the loud buzz around the new energy transition and impressive growth rates, new energy vehicles still struggle to carry the torch due to their small sales base. According to prospectus data, while the company's revenue has surged since 2022, most still comes from fuel vehicles. The revenue share of new energy vehicles was 13.2%, 4.9%, and 16%, respectively, lagging behind domestic leaders overall. As Yin Tongyue previously acknowledged, Chery New Energy "got up early but arrived late." Furthermore, Thalys, another member of Huawei's HarmonyOS Smart Travel Ecosystem Alliance to which Chery belongs, has also rumored actions to go public in Hong Kong, aiming for globalization. Within the alliance, Zhijie's voice is overshadowed by Wenjie. With Thalys also eyeing globalization, Chery faces considerable pressure.

02 Chery "Competes" with BYD

Steve Jobs once said, "Only in competition can we truly unleash our creativity and innovation abilities." In reality, most companies have mixed feelings about fierce competitors. For Chery, behind its years of consecutive championships in Chinese brand passenger vehicle exports, the new energy brand dark horse BYD is gradually becoming a formidable rival. Yiche data shows that in January 2025, BYD's export sales surpassed Chery for the first time, topping Chinese auto exports. In February, BYD's export volume again surpassed Chery to become the sales champion. This is not good news for Chery. In the first quarter of 2025, BYD exported 214,000 vehicles, a 117.27% year-on-year increase, while Chery exported 255,000 vehicles, a mere 0.8% year-on-year increase. In April 2025, BYD's overseas exports surged 91.9% year-on-year, hitting a record high, while Chery's export volume declined year-on-year. Although Chery still leads in sales, facing the aggressive BYD, it urgently needs to find new export growth opportunities. Accelerating technological transformation, global expansion, and brand upgrading through an international capital platform to gain funding and resource advantages amidst fierce industry competition, going public in Hong Kong is undoubtedly a strategic path.

Of course, one is the elder brother in overseas expansion, and the other is the domestic sales champion. The "back view theory" between Chery and BYD has been widely discussed. On the flip side, in terms of domestic sales, BYD has ranked first for three consecutive years. At the 2024 China Automobile Chongqing Forum, Li Yunfei, general manager of BYD Brand and Public Relations Department, bluntly stated, "I hope Chery can see BYD's back and become the second in China." He also hopes Chery can get closer to BYD, the closer the better, because "Chery can help BYD share some of the heat." In terms of the new energy transition, in April 2024, Yin Tongyue said in a live broadcast that by the end of the year, Chery aims to become the second in the new energy industry, "to see the back of Wang Chuanfu (BYD's chairman)." Besides Chery looking up to BYD, Wang Chuanfu has also publicly stated that he must learn from Chery, particularly its globalization strategy. As entrepreneurs from Anhui, Yin Tongyue and Wang Chuanfu share a mutual respect among rivals. However, the real-life version changes swiftly. Chery's new energy vehicle sales have grown rapidly but, due to a small base, its domestic sales failed to become the second in the industry as hoped in 2024. And in the comfort zone of overseas expansion, BYD seems poised to catch up to Chery.

Entering 2025, BYD has significantly narrowed the gap with Chery in export sales, thanks to its rapid growth. In the first quarter, it ranked third with overseas sales of 206,100 vehicles, separated from Chery by just one position occupied by SAIC. The two compete fiercely in overseas expansion and new energy, but compared to BYD's still rapidly growing new energy vehicle sales, Chery's slowdown in overseas growth has added a sense of urgency, potentially driving its IPO in Hong Kong.

03 The Decisive Battle in 2025: Can Chery Win the Turnaround?

At the 2025 Annual Cadre Conference held on February 11, Yin Tongyue stated that Chery must complete four major tasks in 2025: corporate listing, annual business objectives, key capability enhancement, and major technological breakthroughs. Among them, high-quality corporate listing is the company's top priority. The current listing process is underway, and Chery's actions and layouts for and post-listing are in full swing. The new energy transition and intelligence are key starting points. A foreign investment bank executive analyzed that investors now comprehensively consider the progress of new energy transitions and intelligence levels of traditional automakers when viewing automaker listings. Poor performance in these areas makes it difficult to secure a higher valuation. This may be one reason Chery is tightly grasping the new energy transition and intelligence. In fact, Chery started early. As early as 2022, it released the Yao Guang 2025 strategy, encompassing four core technology areas: the Mars architecture, Kunpeng power, Xiongshi technology, and Galaxy ecosystem, with 13 core technologies, clarifying the company's long-term technological layout in new energy, intelligence, and globalization.

In 2023, at Chery's Technology Day, Yin Tongyue announced that Chery would invest over 100 billion yuan in research and development over the next five years, with over 25,000 R&D personnel, more than 50% of whom would be software talents, and the establishment of over 300 Yao Guang laboratories for the electrification and intelligence transition. This ambitious R&D investment target necessitates expanding funding channels through financing. Currently, Chery's new energy layout adheres to the "more children are better for fighting" strategy, with multiple legs walking in pure electric, hybrid, and extended range. At Chery Auto's Hybrid Night in April, the company stated that it would launch 39 hybrid products in 2025, covering multiple models under its brand. Simultaneously, to accelerate hybrid adoption, Chery released a series of preferential car purchase policies, including direct price reductions and trade-in incentives. This concentrated new product launch plan and price discounts demonstrate Chery's urgency in the new energy transition: it hopes to quickly bolster its new energy vehicle sales base. In intelligent driving, Chery held an intelligent driving conference on March 18, officially launching the Falcon Intelligent Driving technology brand and announcing that its entire lineup of fuel and new energy vehicles will be fully equipped with advanced intelligent driving solutions in 2025. This not only responds to BYD's pioneering trend of intelligent driving equality but also attempts to elevate the brand in 2025.

In reality, for Chery, the automotive industry's competition has turned into a red ocean, encompassing globalization, the transition to new energy, and intelligence. The year 2025 marks a pivotal moment for Chery, signaling the commencement of a fresh journey. Nevertheless, from a long-term development standpoint, going public is merely the initial step. The capital market presents its own set of rigorous challenges. Currently, the Hong Kong auto sector boasts a low average price-to-earnings ratio, and investors have grown increasingly wary of the transformation narratives put forth by traditional automakers. For Chery to succeed on its capitalization path, it must demonstrate that its extensive global user base can effectively transform into brand potential in the new energy era, and that its R&D investments can indeed nurture technological advancements with international competitiveness. As Yin Tongyue aptly put it, "Amidst fierce industry competition, it's no longer about sailing against the current; it's more like advancing in a waterfall. Cease, and you will be swept away without a trace."

References: Wallstreetcn, "Chery Challenges BYD"; Guangzhou Daily, "Export Decline in a Single Month, Can Chery Maintain Its 'Top Exporter' Status?"; Bitauto, "BYD Exports About 66,000 Vehicles in January, Surpassing Chery for the First Time to Win the Crown"; Wallstreetcn, "Chery's Yin Tongyue Pursues Wang Chuanfu"; "Chery Automobile Prospectus"