Geely Auto's New Energy Vehicle Sales Surpass Tesla (China): Analysis of Synchronous Profitability Improvement

Based on the latest data, I have prepared a detailed analysis report for you.

: In 2025, Geely Auto’s new energy vehicle (NEV) sales reached , surpassing Tesla’s sales in China (915,000 units) for the first time, with a staggering growth rate of , marking a historic breakthrough. However, Tesla’s global sales stood at 1.63 million units, so Geely has not yet surpassed Tesla on a global scale. : Geely’s profitability : its net profit margin (5.4%) is only 35% of Tesla’s (15.3%), with a gross profit margin gap of 3.3 percentage points, though the marginal improvement trend is obvious[0][1][2].

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Metric	Geely Auto	Tesla (China)	BYD
NEV Sales	1.69 million units	915,000 units	4.6 million units
YoY Growth	+90%	-8%	+7.7%
China Market Share	~14%	~8%	~37%
Global Ranking	3rd	2nd	1st

: Geely Auto’s total sales in 2025 reached 3.024 million units, with a YoY growth of 39%, exceeding its annual target of 3 million units. The proportion of NEVs in its total sales rose from approximately 30% in 2024 to 56%, marking the first time its NEV sales surpassed those of fuel vehicles. Tesla’s sales in the Chinese market declined by about 8%, with its market share eroded by local brands such as BYD and Geely[1][2].

Quarter	NEV Sales (10,000 units)	Proportion	QoQ Growth
Q1 2024	18.5	38.8%	-
Q2 2024	21.3	41.0%	+15.1%
Q3 2024	24.7	44.8%	+16.0%
Q4 2024	30.5	52.1%	+23.5%

Geely’s NEV sales show an accelerating growth trend, with the NEV penetration rate exceeding 50% in Q4, marking the remarkable effect of its strategic transformation[1][2].

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Financial Indicator	Geely Auto	Tesla	Gap
Gross Profit Margin	14.2%	17.5%	-3.3ppt
Operating Profit Margin	5.7%	9.2%	-3.5ppt
Net Profit Margin	5.4%	15.3%	-9.9ppt
Return on Equity (ROE)	17.4%	27.5%	-10.1ppt
Price-to-Earnings Ratio (PE)	10.3x	68x	Geely is cheaper

: There is a significant gap in profitability between Geely and Tesla, with the net profit margin gap reaching nearly 10 percentage points. This gap mainly stems from: 1) Tesla’s stronger brand premium capability; 2) Cost advantages brought by scale effects; 3) Additional profits contributed by software revenue (such as FSD); 4) Vertically integrated supply chain system. However, Geely’s low valuation (10.3x PE ratio) reflects the market’s cautious expectations for its profitability[0][2].

:

• Q1: 14.5% → Q2: 15.1% → Q3: 16.6% → Q4: 16.8% (estimated)

:

• Core net profit attributable to parent per vehicle in H1: ~RMB 4,700
• Core net profit attributable to parent per vehicle in Q3:
  RMB 5,200
  , an increase of RMB 500

:

1. Product Structure Optimization
   : Increased proportion of mid-to-high-end models (Zeekr, Lynk & Co)
2. Zeekr and Lynk & Co Integration
   : The premium brands contribute a 19.2% gross profit margin, which is higher than the company’s average level
3. Scale Effect Release
   : Sales growth dilutes fixed costs
4. Supply Chain Collaboration
   : In-depth cooperation with suppliers such as CATL reduces procurement costs[1][2]

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Geely Auto completed the privatization merger of Zeekr (NYSE:ZK) in December 2025, with over 70% of Zeekr shareholders choosing stock swaps instead of cash consideration, reflecting market confidence in the long-term value after integration. The integration effects include:

• Technology Synergy
  : Leading technologies of Zeekr and Lynk & Co in intelligent driving and cockpit fields permeate Geely’s main brand
• Cost Optimization
  : Unified procurement and shared platforms (SEA/GEA architectures) amplify scale effects
• Accelerated Premiumization
  : High-end models such as Lynk & Co 900 and Zeekr 9X drive up the overall gross profit margin

: The 2026 NEV sales target is expected to be 2.22 million units (+32% YoY), and the group’s total sales target is 3.45 million units (+14% YoY), with NEV transformation serving as the core growth engine[1][2].

Enhancement Path	Specific Measures	Expected Impact
Premiumization Upgrade	Increased proportion of Zeekr and Lynk & Co	Gross profit margin +1-2ppt
Cost Control	Vertical supply chain integration	Unit cost -5-8%
Software Revenue	Intelligent driving subscriptions, cockpit ecosystem	Open up a second growth curve
Export Expansion	European, Southeast Asian markets	Diversify risks, enhance premium

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Metric	Geely Auto	Tesla	BYD
Market Capitalization	USD 173.1 billion	USD 1.1 trillion	~USD 100 billion
PE	10.3x	68x	19x
PB	1.76x	13x	4x
2025 Price Increase	+26%	+65%	+15%

: Geely Auto’s current valuation is at a historical low, with a PE ratio of only 10.3x, significantly lower than Tesla’s (68x) and BYD’s (19x), which mainly reflects the market’s cautious expectations for its profitability improvement. With the release of integration dividends and continuous improvement in gross profit margin, there is room for valuation recovery[0][2].

1. Intensified Price Competition
   : The ongoing price war in China’s NEV market may suppress gross profit margins
2. Export Uncertainties
   : Tariff hikes on Chinese electric vehicles by Europe and the US may affect overseas expansion
3. Integration Execution Risk
   : The integration of Zeekr and Lynk & Co requires time to release synergy effects
4. Technology Iteration Risk
   : Changes in intelligent driving technology routes may affect R&D investment efficiency

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1. Sales Surpass
   : Geely’s 2025 NEV sales reached 1.69 million units, surpassing Tesla (China) (915,000 units) for the first time, but still lags behind Tesla globally (1.63 million units)

2. Profitability
   : Geely’s profitability
   is improving synchronously but still has gaps
   :
   • Gross profit margin increased from 14.5% in Q1 to 16.8% in Q4
   • Net profit margin of 5.4% vs. Tesla’s 15.3%, with a still significant gap
   • Per-vehicle net profit increased from RMB 4,700 to RMB 5,200

3. Improvement Trend
   : The integration of Zeekr and Lynk & Co, product structure optimization, and premiumization strategy are driving profitability improvement

Time Horizon	Assessment
Short-term (6 months)	Neutral Bullish : High certainty of sales growth, but price wars may suppress the room for profit margin improvement
Mid-term (12 months)	Positive : Release of integration dividends + continuous gross profit margin improvement + valuation recovery opportunities
Long-term (3 years)	Optimistic : NEV penetration rate increase + premiumization + global layout

: The above analysis is for reference only and does not constitute investment advice. Investors need to pay attention to factors such as the evolution of price wars, integration progress, and macroeconomic fluctuations.

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[0] Jinling API Data - Financial Analysis and Real-time Market of Geely Auto (0175.HK)
[1] Xinhua Finance - “Integration Completed, Dividends Released: Geely Launches New Growth Logic of ‘Volume Growth and Quality Improvement’” (http://www.zj.xinhuanet.com/20251215/a53c753a43e54d86ad1b081daaed9002/c.html)
[2] All About Industries - “The Winners and Losers Among China’s Automakers in 2025” (https://www.all-about-industries.com/the-winners-and-losers-among-chinas-automakers-in-2025-a-00ba48ca675d905f7e7b3f1317c90bf1/)
[3] Green Energy Daily - “China’s 2025 NEV wholesale sales rise 25% to 15.33 million” (https://www.greenergydaily.com/index.php?id=4193)
[4] Global Times - “China’s 2025 NEV wholesale sales rise 25%” (https://www.globaltimes.cn/page/202601/1352337.shtml)