Recently, Mr. Song Zhiping, Chairman of the China Listed Companies Association, stated that only two new energy vehicle manufacturers are profitable: BYD and Li Auto.
Specifically, in 2023, Li Auto’s total revenue reached 123.85 billion CNY (432.3 trillion VND), a 173.5% increase from the previous year. Li Auto achieved a net profit of 11.81 billion CNY (40.68 trillion VND), with a healthy profit margin of about 9.5%.
In contrast to Li Auto, Nio, despite a 12.9% increase in revenue in 2023, reaching 55.6 billion CNY (193.2 trillion VND), actually lost 100,000 CNY (350 million VND) on each car sold.
Similarly, Xpeng, despite a revenue of 30.68 billion CNY (106.8 trillion VND), incurred a net loss of 10.38 billion CNY (35.6 trillion VND).
The reason for this selling at a loss is that most Chinese car manufacturers are trying to lower car prices to attract users and gain market share.
For automakers that produce both electric vehicles and internal combustion engines, it is possible to cross-subsidize. However, for younger companies that only produce electric cars, the financial situation will be much more difficult.
Not only automakers but also component suppliers and manufacturers are racing to reduce costs below breakeven to increase sales.
According to GlobalData, as many as 150 automotive brands were operating in the Chinese market in 2023, of which 97 were Chinese and 43 were joint ventures with foreign companies (the rest were imports).
TH (Tuoitrethudo)
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