In a significant shift in China’s electric vehicle (EV) market, traditional automakers are being outpaced by local EV manufacturers, The Wall Street Journal reports.
Li Auto LI, a Chinese EV manufacturer, has emerged as a standout player in the market. The company delivered nearly 87,000 cars in the last quarter, tripling its numbers from the previous year. In contrast, deliveries for competitors Xpeng and Nio fell over the same period. Li Auto’s vehicles are primarily plug-in hybrids, which use gasoline to recharge the battery when it runs low. The company’s financial results have also been impressive, with Li Auto achieving profitability in the first quarter, while Nio NIO and Xpeng XPEV remained in the red.
Traditional automakers are also feeling the pressure to adapt their strategies to the burgeoning EV market. Approximately one in three cars sold in China are new-energy vehicles, a ratio that is rapidly increasing. State-owned Guangzhou Automobile has a popular brand, GAC Aion, whose Aion S compact sedan is among the top 10 selling cars in China. However, EVs account for only about a fifth of its total car sales, despite their rapid growth.
Geely Automobile is another potential winner in this market shift. Its premium Zeekr brand, jointly owned with its parent Zhejiang Geely, has been growing quickly. Deliveries of Zeekr vehicles in June grew 147% year on year. Geely’s parent company also owns Volvo Cars and the EV brand Polestar (NASDAGM: PSNY), which could create synergies in design and manufacturing.
2023 is shaping up to be a year of consolidation in China’s car market. Those lagging behind may be culled, but some, like Li Auto, Guangzhou Automobile, and Geely Automobile, are seizing the opportunity to cement their leading positions, potentially for years to come.
Read More: Nio Vs Xpeng Vs Li Auto: How Chinese EV Startups Fared On Q2 Deliveries
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