Charts: NIO, Xpeng, and Li Auto announce earnings for the first quarter of 2025.

      Crowds gathered around NIO's booth at Auto Shanghai 2023, the first Class-A auto show of the year and the first since China fully lifted Covid restrictions in December. Credit: NIO

      Chinese electric vehicle manufacturers NIO, Xpeng Motors, and Li Auto have recently released their first-quarter earnings between May 21 and June 3, revealing a growing divergence in their strategies for achieving market maturity and penetration after a decade of operations. Xpeng reached another record in quarterly deliveries and significantly reduced its losses, achieving its highest growth rate in over ten years. Li Auto remains the most profitable Chinese EV manufacturer, although its revenue growth is slowing due to increasing competition from companies like Huawei and Hong Kong-listed Leapmotor. NIO is encountering greater challenges on its path to profitability than anticipated. Below are some key figures from their Q1 earnings reports.

      Beijing-based Li Auto reported RMB 25.9 billion ($3.6 billion) in revenue from January to March, typically a slow season for auto sales in China, marking only a 1.1% increase year-on-year and a 41.4% decline quarter-on-quarter. In contrast, Xpeng quickly rebounded with a 141.5% year-on-year revenue surge, surpassing NIO in quarterly revenue for the first time ever, largely due to strong demand for its entry-level, tech-enhanced MONA M03 sedans. Xpeng also showed considerable and consistent improvement in its operating margin over the past two years, climbing to negative 6.6% from negative 25.1% a year earlier. However, analysts caution that it remains uncertain whether the company can capture market share in the more profitable premium vehicle sector.

      Li Auto’s operating margin decreased to 1% from 8.4% in the previous fourth quarter, although it improved from the negative 2.3% recorded last year. For NIO, the situation is dire, with its operating margin reported at negative 53.3%, just one percentage point better than the previous year. NIO reported a significant quarterly loss exceeding RMB 6.7 billion in the first three months of this year, contrasting sharply with Li Auto, which saw a profit of RMB 650 million during the same timeframe. Meanwhile, Xpeng's net loss was reduced by more than half to RMB 664 million from about RMB 1.3 billion both quarter-on-quarter and year-on-year.

      Both Xpeng and NIO aim to more than double their annual sales to 380,000 and 440,000 units, respectively, and to achieve profitability in the fourth quarter of the current year. Li Auto has not provided a forecast for annual deliveries, though it has reportedly lowered its sales target to 640,000 units for this year.

      READ MORE: Nio, Xpeng, Li Auto: your cheat sheet to China’s listed Tesla rivals

      Jill Shen is a technology reporter based in Shanghai, covering Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: [email protected] or Twitter: @jill_shen_sh

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