EV giant BYD gets all the credit for the growth of the Chinese electric vehicle (EV) market. As it passed Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) based on global EV sales last year, it hit the top of its game. However, the number two EV company in China recently had a breakout quarter. It showed that not every Chinese EV manufacturer has to suffer in what has become a brutally cutthroat market.
Geely has an EV market share in China of about 8.8%, which puts it second behind BYD’s 26% (based on first-half sales). Geely is well ahead of Tesla, which had a market share of 4.4% for the same period.
In the third quarter, Geely net income rose 59% year over year to $538 million. Revenue was up 27% to just over $12 billion. The company sold 761,000 vehicles, up 43%. It increased its forecast for 2025 unit sales to 3 million. For comparison, Ford sells just over 2 million vehicles per year in the United States.
According to The Wall Street Journal, Geely’s over-the-counter stock is up 16% this year, which is better than BYD’s 13%. The paper added, “Geely’s sales momentum stands out as a bright spot in an industry grappling with policy changes this year.”
Where Is Geely Headed?
It is hard to know what to make of the Chinese EV market. There are, by some counts, over 100 EV companies in the country. About 400 EV companies failed between 2018 and this year. Consulting firm McKinsey expects that to drop to 50 in a few years. This is the primary reason for recent price wars. The financial cost of the fight for survival is often huge losses.
One of the gating questions about whether any Chinese EV company can prosper is whether it can get sales outside its home country. BYD has pushed into parts of Asia and Southeast Asia. It has started to get a foothold in Europe.
Competing with car manufacturers in local markets outside China is a challenge for companies like BYD. It is up against tariffs in some markets. These have effectively locked it out of the United States. As Chinese car companies spread worldwide, they end up dealing with legacy car firms that have started EV divisions of their own. This has happened in Europe and the U.S., with GM among the best examples.
Geely’s success in China will eventually need to turn into one outside it.
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