Chinese EV makers are not doing quite as well as you might think

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China’s Tesla rivals might be booming, but they’re still losing money.

Nio, Zeekr, Xiaomi, and Xpeng have all broken personal sales records in recent months. Xpeng delivered 24,000 vehicles last month, and Xiaomi sold over 100,000 of its SU7 EV this year alone.
However, the booming sales come as many Chinese EV makers continue to report heavy losses, as they grapple with a brutal price war and intense pressure to quickly launch new affordable models amid a crowded field of battery-electric vehicles.
EV startup Nio, known for its battery-swapping stations and run by CEO William Li, sometimes dubbed “the Elon Musk of China,” reported widening losses in its Q3 earnings on Wednesday.
The company reported a net loss of 5.06 billion yuan ($700 million), up 11% from the third quarter of 2023.
Shares plunged nearly 7% in the hours after the announcement, despite Nio delivering 61,800 vehicles in the past three months, a new quarterly record for the company.
The company has been hit hard by the price war that has gripped the Chinese market for much of the past year. Nio said vehicle sales had fallen despite record deliveries due to lower average selling prices.
Nio’s rivals reported a similar blend of booming deliveries and painfully high losses.
Zeekr delivered a record 55,000 vehicles in the third quarter, up over 50% from last year, while fellow EV startup Xpeng recorded record sales of its electric vehicles in October.
Both companies narrowed their net losses year-over-year, but they remained sizable at 1.81 billion yuan ($250 million) for Xpeng and 1.14 billion yuan ($157 million) for Zeekr, respectively.
Smartphone maker Xiaomi, which has pivoted into EVs and received acclaim from Ford CEO Jim Farley, announced it was upping its sales target for its high-tech SU7 electric vehicle after selling over 100,000 this year.
Despite this, the tech giant continues to lose money on its EV venture.

A fight to survive
Xpeng CEO He Xiaopeng told Singaporean newspaper The Straits Times that the competitive pressure means most Chinese carmakers will not survive the next decade.
“From 300 start-ups, only 100 of them survived. Today, there are fewer than 50 companies that still exist, and only 40 of them are actually selling cars every year,” he said.
“I personally think that there will only be seven major car companies that will exist in the coming 10 years,” Xiaopeng added.
One company that is not having the same problems is Tesla’s nemesis BYD.
The automaker posted bumper revenues in its Q3 earnings last month, outstripping Elon Musk’s company in quarterly sales for the first time, and recorded a profit.
BYD’s net profit rose 11.5% from the previous quarter to 11.6 billion yuan ($1.6 billion), and it also sold a record number of vehicles in the third quarter. It’s its success comes as Tesla’s sales in China slip, with the company’s October deliveries down 5.3% from the same month last year.
Analysts previously told Business Insider that BYD was reaping the benefits of its strong hybrid lineup and that its manufacturing approach of making almost every component in-house enabled the company to keep costs low.
“BYD’s high degree of vertical integration — making rather than buying many key strategic components — means it can control production of batteries and chips and can do so at very low cost,” David Bailey, a professor of business economics at the University of Birmingham, told BI.

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