Chinese carmakers struggling to make profit off EVs

Some of the biggest names in plug-in Chinese motoring have confirmed that, in spite of operating on the cutting edge of electric vehicle technology, they are struggling to generate income.

Automotive News reports that while sales of electric vehicles in China are currently very strong, very few of the country’s leading EV manufacturers are recording profits.

The outlet reports that Nio, Xpeng, Li Auto, Changan Automobile Co, and GAC Motor Co have all been hit with rising net losses at the close of the latest quarter.

Nio’s net losses jumped by 370% in Q2 to 2.8 billion yuan, Li Auto’s latest losses are up 172% to 641 million yuan, and Xpeng’s latest losses are up 126% to 2.7 billion yuan.

This is even though all three manufacturers are selling EVs in droves. Combined, Nio, Xpeng, and Li Auto delivered almost 90,000 EVs in Q2.

Nio, occupying the largest slice of the pie with 34,422 deliveries, showed a 98% growth year-on-year.

The industry outlier is BYD. Having recently launched in New Zealand, BYD has also enjoyed strong sales in its homeland. However, unlike some of its peers it’s also in profit; its profits rising to 3.6 billion yuan for the first half of 2022.

Backed by business magnate Warren Buffett, BYD is the latest Chinese brand to execute intentions of branching out beyond China. It is also expanding in terms of which companies it does business with, with other marques utilising its proprietary ‘Blade’ battery technology.

Interest in Chinese vehicles in New Zealand has never been stronger. This is particularly true of EVs. In September the country’s three most popular electric vehicles, the Tesla Model Y, BYD Atto 3, and MG ZS EV, were all built in China.