Geely's aggressive push upmarket: can it unseat BYD's dominance?

Q4 results show progress — and pain

Geely (吉利汽车) reported a stronger-than-expected finish to 2025, with revenue of RMB 105.7 billion (1057亿元), up 22% year‑on‑year and slightly above street estimates. Single‑vehicle revenue rose to RMB 124,000 (12.4万元), driven by a Zeekr (极氪)‑led high‑end surge: Zeekr’s quarterly volumes jumped 52% to 53,000 units and the Zeekr 9X posted an eye‑catching average selling price of RMB 538,000 (53.8万元). Gross margin edged up to 16.9%, helped by higher‑margin models and scale effects as deliveries climbed to 854,000 cars in the quarter.

But the headline improvement masked a material squeeze on operating profit. Heavy one‑time and ongoing investments pushed R&D to RMB 5.9 billion (59亿元) and sales expenses to RMB 6.7 billion (67亿元), leaving core operating profit well below expectations at RMB 2.84 billion (28.4亿元). Net profit attributable to shareholders was RMB 3.74 billion (37.4亿元), roughly in line with consensus only because stronger results from joint ventures padded the bottom line. In short: revenue and ASP are rising, but aggressive spending is eating current profitability.

Strategy: high‑endisation plus rapid overseas growth

Geely’s signal is clear: win the profit pool by moving upmarket and scaling exports. The company set ambitious 2026 targets — 3.45 million vehicles in total, 2.22 million new energy vehicles (NEVs) and about 640,000 overseas sales, with NEV penetration targeted at 64%. Geely’s Galaxy (银河), Lynk & Co (领克) and Zeekr brands are all being pushed toward electrification and premium positioning; Zeekr alone delivered 1.688 million NEVs in 2025 and is positioned as the margin driver going forward. It has been reported that Geely sees overseas channels — where ASPs and margins are markedly higher — as the fastest route to restoring profitability.

Can Geely meaningfully challenge BYD?

BYD (比亚迪) still rules China’s EV market by a large margin. Can Geely unsettle that lead by piling into premium EVs and exports? Reportedly, the approach has legs: overseas ASPs are already about 1.7x domestic prices with roughly 10 percentage points higher gross margins, and Geely’s export run‑rate through early 2026 suggests the company can reach its overseas targets quickly. But there are risks: intense promotional spending, the heavy R&D bill for new high‑end models and intelligent driving stacks, and growing geopolitical scrutiny of Chinese tech exports and supply chains could complicate scaling overseas — and margins — even as volumes climb.