In the first half of this year, the financial reports of several listed car companies in China have shown that losses are increasing across the board, and performance continues to decline. Among them, NIO and six other car companies collectively reported losses of 18 billion yuan in the first half of the year, reducing the industry’s profit margin to a recent low.
On September 2nd, NIO released its financial report for the second quarter of 2025, showing a net loss of 4.99 billion yuan for the quarter, a slight reduction compared to the previous period. Throughout the first half of 2025, NIO accumulated a net loss of 11.75 billion yuan, further expanding from the same period last year.
NIO’s founder, Chairman, and CEO, William Li, stated in the financial report that the company aims to achieve profitability in the fourth quarter but is facing “tremendous challenges.” Behind this predicament lies the increasingly fierce market competition and the company’s heavy financial burden.
A recent announcement from Zotye Auto revealed the fatal dilemma it is facing. Due to court-ordered demolition, Zotye Auto’s Chongqing branch’s full assembly production line and related equipment for the T300 model have been dismantled and failed to sell in the auctions.
The announcement stated that Zotye Auto no longer has the conditions for resuming production of the T300 model this year. This means that the company will be unable to resume production for the whole year, posing a “significant risk of uncertain financial sustainability.”
Financial data shows that Zotye Auto’s operating income in 2024 was 558 million yuan, a 23.96% decrease year-on-year; the net loss amounted to 1 billion yuan, with a 6.82% increase in losses compared to the previous year. Furthermore, in 2024, the company only sold 14 vehicles, a staggering 98.74% drop, with zero production output.
The challenges faced by the aforementioned car companies are a microcosm of the overall profitability pressure in the entire Chinese automotive industry. According to a compilation by “Yicai” of the financial reports of 16 passenger car companies listed on A-shares and H-shares, the performance of Chinese car companies in the first half of the year has shown a significant differentiation, but the decline in losses and profits has become a mainstream trend.
In the first half of this year, six car companies reported losses, including Guangzhou Automobile Group, BAIC BluePark New Energy Technology Co., XPeng Motors, JAC Motors, Zotye Auto, and Hawtai Motor, with a total loss of nearly 7 billion yuan.
The profitability of Chang’an Auto, SAIC Motor Corporation, Guangzhou Automobile Group, Great Wall Motors, BAIC Motor, JAC Motors, and Geely Auto has significantly decreased. Among them, JAC Motors and Guangzhou Automobile Group reported a year-on-year decline in net profit margins of up to 357% and 267%, respectively.
In addition, from January to July 2025, the profit margin of the automotive industry was only 4.6%, reaching a historically low level. In July alone, industry profits decreased by 17% year-on-year, further dropping the profit margin to 3.5%, showing a significant decrease both sequentially and year-on-year.
The total net profit of the 16 Chinese passenger car companies in the first half of the year exceeded 39.2 billion yuan. In comparison, Toyota alone reported a net profit of around 72.7 billion yuan in the first half of the year, 1.9 times the total profit of the 16 Chinese car companies.
Industry insiders generally believe that these data reflect the multiple challenges facing the Chinese automotive industry: accelerated technological iterations, intensified competition from new energy vehicle forces, adjustments in local subsidy policies, and pressures on the supply chain, among other factors, collectively pushing the industry’s overall profit margin to a historical low.