Geely Holding Group’s high-end electric vehicle brand Zeekr recently released its first financial report since going public. In the first quarter of this year, although sales surged, the net loss exceeded 2 billion yuan. Chinese electric vehicle companies have been operating at a loss for years, and Zeekr seems to be following in their footsteps.
According to reports from The Paper and Red Star News, Zeekr Intelligent Technology Holding Co., Ltd. released its financial report on June 11, showing a revenue of 14.737 billion yuan in the first quarter of 2024, a year-on-year increase of 71%, and a quarter-on-quarter decrease of 9.9%. The net loss was 2.022 billion yuan, with a year-on-year decrease of 18% and a quarter-on-quarter decrease of 31.2%. As of March 31, 2024, the company had cash, cash equivalents, and restricted cash totaling 3.791 billion yuan.
Zeekr delivered a total of 33,100 vehicles in the first quarter, a 117% year-on-year increase. In April and May, they delivered 16,100 and 18,600 vehicles respectively.
The company’s overall gross profit margin was 11.8%, compared to 7.9% in the same period last year and 14.2% in the previous quarter.
Analysts from Autohome believe that the decline in gross profit margin in the automotive sector is mainly due to changes in product structure, price wars, and a decrease in sales volume during the Chinese New Year period.
Zeekr is a luxury smart pure electric brand under Geely Holding Group, founded in 2021, with Li Shufu, chairman of Geely, serving as chairman of Zeekr. Just last month, on May 9, Zeekr was listed on the New York Stock Exchange.
It is worth noting that Chinese electric vehicle companies have been operating at a loss for many years. Among them, the four “new forces in car-making” in China recently released their financial reports for the first quarter of this year, showing that NIO incurred a net loss of 5.26 billion yuan, XPeng a net loss of 1.37 billion yuan, Li Auto a net loss of 580 million yuan, and Leapmotor a net loss of 1.013 billion yuan.
In recent times, there has been intensified competition within the Chinese automotive industry, with ongoing price wars. Several executives from the automotive industry in China have spoken out against the industry’s internal collapse. Geely Holding Group Chairman Li Shufu pointed out that endless internal competition and brutal price wars result in corner-cutting, fraud, and non-compliant disorderly competition.