Author | Zhou Zhiyu
Geely aims to achieve the highest sales of passenger cars in China this year.
On March 18, at Geely Auto's 2025 annual performance meeting, Geely Automobile Holdings Limited's CEO and Executive Director Gui Shengyue stated, &#34;We strive to achieve the highest domestic sales in China by 2026.&#34;
From a comprehensive category perspective, BYD held the top position last year, with approximately 3.55 million units sold domestically in 2025. Geely sold 3.025 million units, a gap of 530,000 units. Changan and Chery, trailing behind, are also accelerating. The top four Chinese domestic brands are all close to the 3 million unit threshold, while multiple institutions predict that the overall growth rate of the car market will drop to low single digits in 2026.
Gui Shengyue's confidence comes from a fact that is currently unfolding: at the beginning of 2026, Geely has ranked first in China's passenger car sales industry for two consecutive months.
The growth logic of China's car market in recent years has been driven by the penetration of new energy vehicles expanding the overall market— the pie is getting bigger, and most players can share in the incremental growth. This logic will begin to fail in 2026. The Passenger Car Association predicts that the annual sales may be flat compared to 2025, while the China Association of Automobile Manufacturers forecasts only a 1% increase. After the growth dividend fades, the Chinese car market is entering the first half of a competition for transformation speed, switching to the second half focused on system efficiency. Each car company must demonstrate its true capabilities at this juncture.
<h2>New Energy Doubling</h2>
Geely's bold claim of &#34;domestic first&#34; relies on the explosive growth of new energy vehicles in 2025.
Total new energy vehicle sales reached 1.688 million units, a year-on-year increase of 90%, with the proportion of total sales rising from 37% to 56%. Second only to BYD, it ranks as the second globally. Two years ago, this figure was less than 500,000 units.
The main driver is Geely Galaxy. With 1.236 million units sold, it saw a year-on-year increase of 150%, achieving annual sales of over a million in just 29 months. Geely Xingyuan became the top-selling passenger car across all categories for the year, and the Galaxy M9 surged into the top three in the mid-to-large SUV category from its launch in September to the end of the year.
This speed indicates one thing: the landscape of the mainstream new energy market priced between 100,000 to 200,000 yuan has not yet solidified. In 2025, nearly 7 million new energy vehicles were sold in this price range, a year-on-year increase of 24%, making it the fastest-growing segment in the entire car market. The Galaxy jumped from 490,000 units a year ago to 1.24 million units, indicating that consumer brand loyalty is not locked in. Whoever has a faster product rhythm and better cost performance can capture market share.
ZEEKR is taking a different path. With annual sales of 224,000 units, the volume is not large, but in the fourth quarter, following the launch of the ZEEKR 9X, it surpassed 80,000 units in a single quarter. Geely Automobile Group CEO Gan Jiayue revealed to Wall Street that the delivery cycle for the ZEEKR 9X is expected to shorten from 11 weeks to 8 weeks. The ZEEKR 8X, which began pre-sales on March 16, received over 30,000 orders in less than 48 hours.
The value of ZEEKR lies not in volume, but in profit. The brand's gross margin in the fourth quarter was 23%, with the ZEEKR 9X's gross margin per vehicle approaching 40%. Geely Automobile Group CFO Dai Yong stated that ZEEKR's sales proportion in the fourth quarter rose from 7.5% for the year to 9.5%, directly pulling the overall gross margin up to 16.9%. For reference, Chery's annual gross margin was 13.8%, and Nio's was 13.6%.
The Chinese car market is entering a new phase: after years of price wars, companies have already squeezed costs to the bone, leaving limited room for further price reductions. The competition ahead will be about who can provide higher product value at the same price and who can increase profit margins through high-end products
ZEEKR 9X has a gross profit margin close to 40%, which is a card that Geely has played in this profit competition.
Fuel vehicles are not left behind either. The China Star brand sold 1.214 million units throughout the year, achieving growth against the backdrop of an overall market decline of 4.6%. Gui Shengyue made a point, stating it more than once: &#34;For a considerable period in the future, automobile companies with multiple energy sources will definitely be the most valuable.&#34; It is clear who this statement points to.
<h2>100 Billion Integration Bill</h2>
Beyond selling cars, Geely's biggest task in 2025 is to reorganize itself.
ZEEKR's privatization was announced in May and completed in December, costing about 17 billion yuan in less than eight months. Acquiring 50% of Lynk &amp; Co's shares cost 9.5 billion yuan. Together, these two transactions amount to 26.5 billion yuan—nearly double the annual core profit of 14.4 billion yuan. Total borrowings increased from 7.6 billion to 18.3 billion yuan, and the capital liability ratio rose from 8.8% to 19.8%.
Gui Shengyue elevated this matter to the level of organizational capability. &#34;In such a fiercely competitive automotive industry, Geely has demonstrated courage, determination, and efficiency in responding to changes in the situation.&#34;
Operational cash flow can sustain this cost. The net operating cash flow for the year was 47.3 billion yuan, with total cash at the end of the year reaching 68.2 billion yuan, resulting in a net cash of 49.9 billion yuan after deducting borrowings.
Why spend such a large amount on integration during the most intense competition? Because the competitive dimensions of the Chinese auto market are changing.
In the past three years, the theme of the industry was &#34;new energy replacing fuel,&#34; focusing on who could transform quickly, who had more products, and who could scale up aggressively. The upcoming theme is shifting to &#34;system efficiency&#34;—whether R&amp;D resources can be reused across brands, whether the supply chain can negotiate collectively, and whether channels can be shared.
Previously, Geely's three brands fought their own battles, with Galaxy, Lynk &amp; Co, and ZEEKR each having their own R&amp;D, procurement, and sales systems, leading to inevitable repeated investments. The purpose of integration is to eliminate these internal frictions.
An Conghui, CEO of Geely Holding Group, provided a quantifiable piece of evidence: Geely Holding and Volvo generated 5 billion yuan in benefits last year just from procurement synergies. &#34;Without Volvo's help and support, could Geely's safety have improved so quickly?&#34; he asked, noting that the performance of ZEEKR 9X also relies on Lotus's chassis tuning.
This represents the fundamental path difference between Geely and BYD. BYD's competitiveness comes from vertical integration—self-research and production of batteries, motors, and chips, driving costs down to levels unreachable by others. Geely, on the other hand, follows a horizontal integration approach—Volvo, Lotus, Proton, Hozon, and Renault joint ventures, creating a brand and technology ecosystem spanning Europe and Asia. These assets were cost burdens before integration; whether they can become competitive advantages after integration is illustrated by the 5 billion yuan procurement synergy, which is the first quantifiable answer. However, compared to BYD's structural advantages on the cost side, this is just the beginning.
Dai Yong supplemented this with expense ratios: the sales expense ratio dropped to 5.9%, and R&amp;D investment as a percentage of revenue fell to 6.3%. Total R&amp;D investment for the year was 21.9 billion yuan, an increase of 8.3%, outpacing revenue growth.
One detail is worth highlighting.
Geely's R&amp;D expense capitalization rate (the proportion of current R&amp;D investment directly counted as expenses) increased from 31% in 2024 to 36% for the entire year of 2025, with the fourth quarter alone reaching 43%. Dai Yong stated that the goal for 2026 is to maintain it above 40%
&#34;Make profits of higher quality.&#34;
This change explains a contradiction that an investor may notice: the gross profit margin rose to 16.9% in the fourth quarter, but overall profit improvement was not significant. The reason is that the capitalization rate of R&amp;D expenses jumped, with R&amp;D expenses in the fourth quarter reaching 5.9 billion yuan, nearly 50% higher than the approximately 4 billion yuan per quarter in the previous three quarters. Profits were actively &#34;compressed&#34; a bit.
The low capitalization rate has been a point of skepticism for Chinese car manufacturers in recent years—capitalizing a large amount of R&amp;D expenditure makes short-term profits look good, but the amortization pressure in the coming years will continue to drag down the financial statements. By actively increasing this ratio, Geely chooses to let current profits be under pressure in exchange for cleaner subsequent financial statements. This choice itself is also a statement of confidence in underlying profitability.
Net profit attributable to shareholders was 16.85 billion yuan, a year-on-year increase of only 0.2%—distorted by the 9.35 billion yuan off-balance-sheet income from Haosi Power in 2024. Excluding this, the core net profit was 14.41 billion yuan, a year-on-year increase of 36%.
<h2>Addressing Weaknesses</h2>
Gui Shengyue spent a long time discussing the industry at the earnings conference.
He did not shy away from the issues and proactively pointed out three shortcomings: brand building, overseas scale, and customer service. He then directed his criticism at the industry: &#34;There is a blind pursuit of 'speed' in the Chinese new energy market. Many misleading marketing messages are astonishing, and some car manufacturers have disregarded vehicle safety in many aspects to reduce costs.&#34;
This statement is heavy but points to a real turning point in the industry. Over the past three years, the competition among Chinese new energy car manufacturers has been centered on speed and price—who launches new cars quickly, who prices lower, and who has a louder marketing voice. This approach has been effective in a growing market because new users keep coming in, and the cost of making mistakes is low.
As the market enters a phase of competition for existing users, when users start to replace their second or third new energy vehicles, the weight of &#34;slow variables&#34; such as safety, quality, and after-sales service will quickly rise.
Gui Shengyue listed building the world's largest automotive safety center by 2025 as the top priority among the five major tasks for the year. &#34;Whether it's a luxury car worth hundreds of thousands or millions, or a popular product aimed at the public, all will undergo the same rigorous testing standards at Geely.&#34;
In terms of intelligence, he provided a benchmark: &#34;Geely's autonomous driving is expected to reach the level of Tesla's FSD within this year.&#34; The day before the earnings release, Jensen Huang, CEO of NVIDIA, showcased AI physical applications at the GTC conference, using Geely cars.
However, if one were to point out Geely's most obvious shortcoming, it would be exports.
This shortcoming is particularly glaring under the industry trend. In 2025, China's automobile exports are expected to reach 7.1 million units, a year-on-year increase of 21%. The overseas market has shifted from being a &#34;bonus&#34; to becoming the core growth engine for leading car manufacturers—nearly half of Chery's sales come from overseas, and BYD's overseas sales exceeding one million units was the most important growth story last year. As the domestic market enters a competitive red sea, overseas markets are one of the few places where incremental growth can still be achieved.
Gan Jiayue did not avoid this issue at the earnings conference. &#34;In 2026, all resources of the group will be prioritized for international business.&#34; The plan for overseas stores this year exceeds 1,300, with popular products being launched globally, and Lynk &amp; Co leveraging Volvo's channels to gain traction in Europe. In the first two months of 2026, exports have already exceeded 60,000 units, a year-on-year increase of 129%
Geely previously announced an overseas sales target of 640,000 units, and Gui Shengyue revealed that the internal challenge target for this year is 750,000 units.
Geely has Proton, a joint venture with Renault in Brazil, and Volvo's European resources. These assets are not available to other domestic brands, but so far, they have not been truly realized in terms of export scale. The year 2026 will be a key year to test whether these assets can transform from &#34;strategic layout&#34; to &#34;real sales.&#34;
The annual target of 3.45 million units is only a 14% increase, and the capital expenditure budget of 16 billion is even less than last year's actual 17.9 billion. The pace of expansion is slowing, and the weight of efficiency is increasing.
At the end of the earnings call, Gui Shengyue said: &#34;We have established the most complete technological ecosystem among Chinese automotive companies. Which company has such a comprehensive layout as Geely in terms of cockpit, autonomous driving, chips, batteries, and future mobility?&#34;
Two and a half years ago, he mentioned in an earnings call: future earnings releases will always set new sales records. In 2025, this was fulfilled.
&#34;There is a high probability that in the future, every earnings release will see core scale net profit reaching a historical high.&#34; This is a new commitment.
Next, the domestic first needs to be fulfilled. Whether the integration of Hongli can be released in time, whether exports can turn from a 14% shortcoming into a growth engine, and whether Geely's system capabilities are strong enough after the Chinese auto market shifts from incremental competition to stock game, all the answers will be revealed in 2026

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The scale effect is beginning to be realized

- Geely aims to become the top-selling passenger car brand in China by 2026, following a record high in sales during the beginning of the year.  
- The growth of Geely's new energy vehicles has been significant, with sales doubling in 2025, contributing to its assertion of leadership in the market.  
- As competition intensifies and growth rates decline, Geely plans to focus on improving operational efficiency and expanding international sales while addressing internal challenges such as brand development and customer service.

Geely's integration concludes, aiming for the top spot in the domestic market