The Chinese electric industry is not doing as well as it seems

Nio, Zeekr, Xiaomi and Xpeng have all broken their sales records in recent months. Still, they could be losing money.

Tesla’s Chinese rivals may be growing, but they continue to lose money.

As explained by , the booming sales of Chinese companies come at a time when many Chinese electric vehicle manufacturers continue to record large losses.

A “brutal” price war and pressure Intense efforts to quickly launch new affordable models are the two main factors responsible for this decline.

In November, electric vehicle company Nio, known for its battery-swapping stations and led by CEO William Lisometimes called “o Elon Musk da China”recorded increasing losses in its third quarter results.

The company reported a net loss of 5.06 billion yuan (665 million euros) – 11% more than in the third quarter of 2023.

The company was hit hard by the price war that dominated the Chinese market for much of last year.

A Nio confirmed that vehicle sales had fallen, despite record deliveries, due to decline in average selling prices.

Nio’s rivals reported a similar mix of surging deliveries and painfully high losses.

Or smartphone manufacturer Xiaomiwhich has dedicated itself to electric vehicles announced that it was increasing its sales target for its high-tech SU7 electric vehicle, after having sold more than 100,000 this year. Despite this, the technology giant continues to lose money.

Quoted by Bisness Insider, the CEO of Xpeng, He Xiaopengsaid competitive pressure means most Chinese automakers will not survive the next decade.

“Out of 300 start-up companies (…) today, there are less than 50 companies that still exist and only 40 of them actually sell cars every year. Personally, I think that Only seven large companies will resist automobiles in the next 10 years,” he told Singapura The Straits Times.

BYD is the exception

A BYDon the contrary, is holding up well.

The car manufacturer registered extraordinary recipes in the third trimester, overtaking Tesla in quarterly sales for the first time.

As Business Insider details, the net profit BYD increased 11.5% from the previous quarter to 11.6 billion yuan (around 1.5 billion euros), having also sold a record number of vehicles in the third quarter.

David Baileyprofessor of business economics at the University of Birmingham, explained to Business Insider that BYD is reaping the benefits of its strong hybrid lineup and that its approach to in-house manufacturing of almost all components allowed the company to keep costs low.

“BYD’s high degree of vertical integration – make instead of buy many key strategic components – means it can control battery and chip production and can do so at a very low cost,” said the expert.