①In 2025, following Li Auto, Leapmotor became the second continuously profitable new energy vehicle startup. ②The losses of XPeng Motors and Nio have also significantly narrowed, bringing a long-awaited glimmer of profitability to new energy vehicle startups. ③Due to cost provisions related to the MEGA recall and slower-than-expected production ramp-up for pure electric models, Li Auto reported a quarterly loss of 624 million yuan in Q3 2025.
Cailian Press, December 29 (reporter Xu Hao) From the early days of ‘burning money for market share’ to expanding at scale while experiencing widening losses, the phenomenon of ‘selling more but losing more’ once seemed an inescapable curse for China’s new energy vehicle startups. Now, as leading companies approach their tenth anniversary, the industry is witnessing a pivotal turning point.
In 2025, following $Li Auto (LI.US)$ / $LI AUTO-W (02015.HK)$ , $LEAPMOTOR (09863.HK)$ became the second continuously profitable new electric vehicle startup, with $XPeng (XPEV.US)$ / $XPENG-W (09868.HK)$ and $NIO Inc (NIO.US)$ / $NIO-SW (09866.HK)$ ‘s losses also significantly narrowing, bringing long-awaited profitability to the new EV ventures.
Leapmotor’s Sustained Profitability Secures Annual Sales Target of One Million Units
“The past decade has been extremely challenging for us, one might say ‘nine deaths and one life,’ with many doubting our potential.” On December 28, during the company’s tenth anniversary celebration, Leapmotor Chairman Zhu Jiangming reflected on the company’s ten-year journey in automobile manufacturing: “Leapmotor approaches the ToC market with a ToB mindset, leveraging technological innovation and self-researched manufacturing to achieve the industry’s most competitive vehicle costs, while adhering to cost-based pricing to benefit consumers.”
By 2025, as the ‘nine-time champion’ of new energy vehicle delivery rankings, Leapmotor delivered 536,000 vehicles from January to November, marking a year-on-year growth of 113.42%. In October and November, Leapmotor consecutively exceeded 70,000 deliveries per month, continuously breaking monthly sales records for new energy vehicle startups.
Financial reports indicate that Leapmotor achieved quarterly profitability ahead of schedule in Q4 2024, becoming the second new energy vehicle startup to achieve single-quarter profitability; the company turned its semi-annual net profit positive in the first half of this year, with Q3 net profit further increasing to 150 million yuan.
“Leapmotor’s long-term goal is to become a world-class automaker selling four million vehicles annually, with 2026 designated as the ‘Year of Breaking One Million Units,’ aiming to fully challenge the annual sales target of one million units.” Zhu Jiangming outlined next year’s sales target.
On December 29, Leapmotor announced that it had entered into a domestic share subscription agreement with China FAW Group, stipulating that FAW Equity would subscribe to 74,832,245 domestic shares at 50.03 yuan per share (equivalent to 55.29 Hong Kong dollars). After the completion of the subscription, FAW Equity will hold approximately 5% of the company’s shares, becoming one of its significant shareholders. Prior to this, in October 2024, Leapmotor received strategic investment from Stellantis Group, holding about 19% stake. As a result, Leapmotor formed a stable ‘equity triangle’ comprising the founding team, international automakers, and domestic central enterprises.
“With the addition and support of major shareholders, along with cooperation at the strategic and product levels, the company’s stability will be stronger,” said Zhu Jiangming.
XPeng Motors is making a strong push toward achieving its Q4 profitability target.
The fundamental logic behind Leapmotor’s survival strategy has, to a certain extent, become a microcosm of the new energy vehicle sector over the past decade.
XPeng Motors, which is striving for profitability in the fourth quarter, achieved revenue of 20.38 billion yuan in Q3, representing a year-on-year increase of 101.8% and a quarter-on-quarter growth of 11.5%. Net losses narrowed to 380 million yuan, approaching the break-even point. The overall gross margin reached 20.1% in Q3, up by 4.8 percentage points year-over-year and 2.8 percentage points quarter-over-quarter.
“In Q3, our company’s overall gross margin exceeded 20% for the first time, and net losses further narrowed. Our goal is to achieve break-even in Q4,” said He Xiaopeng, Chairman of XPeng Motors, during the Q3 earnings call.
Following a strategic investment from Volkswagen Group, XPeng Motors’ collaboration with the automaker has entered the technology monetization phase. In Q3, XPeng Motors generated 2.33 billion yuan in service and other revenues, marking a 78.1% year-over-year increase compared to the same period in 2024 and a 67.3% quarter-over-quarter rise. This segment accounted for approximately 10% of XPeng Motors’ total revenue.
It is reported that Volkswagen will be the launch customer for XPeng’s second-generation VLA model. Additionally, XPeng’s Turing AI chip has secured a定点from Volkswagen. The first jointly developed model, named “Zhongyu 07,” will officially commence production at Volkswagen Anhui on December 31.
For Q4 2025, XPeng Motors expects vehicle deliveries to range between 125,000 and 132,000 units. As of November 2024, XPeng delivered a cumulative total of 392,000 vehicles, reflecting a 155.54% year-over-year increase. Based on this figure, XPeng aims to deliver approximately 46,000 to 53,000 vehicles in December.
Nio, which is also targeting profitability in Q4, has demonstrated a trend of “high revenue growth accompanied by substantial losses.” Revenue in Q3 reached a record high of 21.79 billion yuan, but net losses remained at 3.48 billion yuan. “The gross margin for vehicle sales reached 14.7% in Q3 and is expected to improve further to 18% in Q4. We are confident in achieving profitability in Q4,” emphasized Li Bin, Chairman of Nio, during the Q3 earnings call. He also reiterated Nio’s operational target of achieving full-year profitability by 2026.
According to Li Bin, the “three key drivers” behind Nio’s growth are technological capabilities, a three-brand strategy, and operational efficiency. The release of technological dividends has directly enhanced the price competitiveness of Nio’s new products.
“Our self-developed Shenji NX9031 chip delivers computational power equivalent to four industry-leading chips, reducing costs by over 10,000 yuan per vehicle. Combined with VAT and gross margin impacts, this translates into potential pricing benefits of up to 20,000 yuan per vehicle,” disclosed Qin Lihong, President of Nio.
Li Auto ‘lost Jingzhou due to carelessness’ and seeks change after quarterly net loss.
Compared to XPeng Motors and Nio, which are still striving for profitability, Li Auto’s previously consistent achievement of 11 consecutive quarters of profit has taken a dramatic turn.
Due to the recall provision costs for MEGA and lower-than-expected ramp-up of production capacity for electric models, Li Auto incurred a quarterly loss of 624 million yuan in Q3 2025. ‘In accordance with accounting standards and based on the current situation, we have treated the recall of the 2024 MEGA as a subsequent event and provisioned approximately 1.1 billion yuan for warranty costs related to the MEGA recall in Q3,’ said Li Auto’s CFO, Li Tie, during the Q3 earnings call.
Li Auto’s Chairman, Li Xiang, reflected extensively on the company’s organization, products, and technology over the past three years during the Q3 earnings call, stating, ‘Starting from Q4 this year, we will firmly return to a venture management model to face the challenges of a new era and new technologies.’
According to Li Xiang’s vision, over the next decade, Li Auto will ‘become the best-performing company in the field of embodied intelligence.’ To achieve this vision, ‘the most important task is to build an AI system distinct from language-based intelligence.’
‘The AI inference chip is the computational core of this system. The controller equipped with our self-developed chip has begun large-scale system testing and is expected to be officially deployed next year. Combined with our foundational large model, compiler, and software system, we anticipate that the performance-to-cost ratio of M100 on the next-generation autonomous driving system under the VLA architecture will be more than three times that of current high-end chips,’ emphasized Li Auto’s CTO, Xie Yan, during the Q3 earnings call, highlighting the importance of self-developed chips and other proprietary technologies.
According to Zhang Yongwei, chairman of Chebaihui, sales of new energy vehicles (including exports) are expected to reach 20 million units in 2026, with a domestic penetration rate of 57%; the total number of vehicles in use will exceed 60 million, accounting for 15%. Industry insiders believe that leading new forces can reduce supply chain costs while increasing product premium by independently controlling core technologies, thereby further expanding economies of scale. ‘Against the backdrop of an overall upward market trend, coupled with the continued maturation of technology and management systems, the profitability of these four new carmakers will also significantly improve.’
Editor/jayden
