According to the Financial Alliance on March 22, (Reporter Xu Hao) as of March 22, the performance of new car-making forces "Weilai, Xiao, Li" for the fourth quarter and the whole year of 2024 has been fully released.

$Li Auto (LI.US)$ / $LI AUTO-W (02015.HK)$ With stable delivery volume and revenue growth, despite facing the dilemma of "increased revenue without increased profit," ample cash reserves provide protection for subsequent development; $NIO Inc (NIO.US)$ / $NIO-SW (09866.HK)$ Growth in sales and revenue has been achieved through a multi-brand strategy and the expansion of battery swapping networks, along with an increase in gross margin; however, the significant losses still need to be resolved. $XPeng (XPEV.US)$/ $XPENG-W (09868.HK)$ Relying on product strategy adjustments and technological innovations, rapid increases in both sales and revenue have been realized, resulting in a substantial narrowing of losses and a significant increase in gross margin.

To address challenges, all three car companies are continuously focusing on technological innovation, cost control, and market expansion. NIO and XPeng, which are still in a loss state, have locked in their profitability time for the fourth quarter of this year.

XPeng has the largest revenue increase, while Li Auto has the most abundant cash.

Li Auto, which has been profitable for nine consecutive quarters among new car-making forces, achieved revenue of 144.5 billion yuan in 2024, a year-on-year increase of 16.6%, surpassing 100 billion yuan in revenue for two consecutive years, with total deliveries reaching 500,508 units, maintaining the top position among new car-making forces in sales. In the fourth quarter, revenue reached 44.27 billion yuan, with quarterly deliveries of 158,696 units, both hitting historical highs. By December 31, 2024, Li Auto's cash reserves reached 112.8 billion yuan, the most robust financial backing among the three companies.

However, facing the 'increasing revenue without increasing profit' situation in 2024 indicates that Li Auto must balance between market share and profit. Li Auto's net income for 2024 was 8.05 billion yuan, a year-on-year decrease of 31.9%; the fourth quarter net income was 3.53 billion yuan, a year-on-year decrease of 38%. The annual automotive business gross margin was 19.8%, a year-on-year decrease of 1.7 percentage points; the fourth quarter gross margin for automotive business was 19.7%, a year-on-year decrease of 3 percentage points, and a quarter-on-quarter decrease of 1.2 percentage points. The main reason for the profit decline was the increased sales proportion of Li Auto L6, which lowered the overall gross margin level; simultaneously, to enhance product competitiveness, the interest subsidies and other incentives for car purchases also somewhat compressed the profit space.

In comparison, XPeng Motors performed exceptionally well in the fourth quarter, achieving the largest growth among the three companies, with total annual revenue reaching 40.87 billion yuan, a year-on-year increase of 33.2%; a total of 90,068 new vehicles were delivered throughout the year, a year-on-year increase of 34.23%. Fourth-quarter revenue was 16.11 billion yuan, a year-on-year increase of 23.4%, and a quarter-on-quarter increase of 59.4%; delivery volume reached 91,507 units.

Xpeng's growth is mainly attributed to adjustments in product strategy, launching the Xpeng MONA M03 and Xpeng P7+ targeting the young consumer group, using a combination of "technology equality + precise positioning" to open up incremental markets. These two models saw a significant increase in sales, becoming important engines for overall delivery volume.

Xpeng Motors reported a net loss of 5.79 billion yuan in 2024, a 44% reduction year-on-year, with a significant increase in gross margin, rising from 1.5% in 2023 to 14.3%. The gross margin for autos improved from -1.6% to a positive 8.3%, and the gross margin for autos in the fourth quarter even reached 10% for the first time, marking a peak for the year.

NIO's revenue for 2024 reached 65.73 billion yuan, an 18.2% year-on-year increase, delivering a total of 221,970 new vehicles for the year, which is a 38.7% increase year-on-year. In the fourth quarter, revenue was 19.7 billion yuan, up 15% year-on-year, with 72,689 new vehicles delivered. However, NIO's net loss for the whole year rose to 22.4 billion yuan, an increase of 8.1%. Although the overall gross margin improved from 5.5% in 2023 to 9.9%, and the gross margin for autos reached 12.3%, losses are still expanding.

The reasons for NIO's expanding net losses include changes in investment returns and exchange rate losses, with a total investment net loss of 0.17 billion yuan in the fourth quarter, compared to an income of 1.368 billion yuan in the same period last year. Additionally, exchange rate losses further intensified the company's financial burden. Furthermore, the continuous growth of sales, general, and administrative expenses, which reached 4.878 billion yuan in the fourth quarter of 2024, an increase of 22.8% year-on-year, is directly related to the market promotion of new brands and products and expansion of the company's network, putting pressure on profits.

Increase R&D investment to solidify technological "moats."

The competition in the new energy vehicle market is becoming increasingly fierce, and the advantages of leading companies are gradually becoming more prominent, putting significant pressure on Li Auto, NIO, and Xpeng. R&D is the core competitiveness of new energy vehicle companies, and all three companies increased their R&D investments in 2024, achieving certain results in key areas such as intelligence and electrification.

Li Auto's R&D investment in 2024 was 11.07 billion yuan, a year-on-year increase of 4.6%, marking the second consecutive year of R&D investment exceeding 10 billion yuan. In the area of intelligent driving, Li Auto fully pushed its software based on end-to-end + VLM to users by the end of 2024, becoming the first company in the industry to apply end-to-end technology to urban and highway full-scene intelligent driving.

Xpeng Motors' R&D investment in 2024 was 6.457 billion yuan, a year-on-year increase of 22.4%. In terms of intelligent driving, Xpeng has built a globally applicable architecture, being one of the only two companies worldwide capable of operating without relying on high-precision maps and Lidar, using a single software across various models to achieve "usable globally". In the area of electric power systems, Xpeng launched a new generation electric power system, the Kunpeng super electric system, to provide power solutions for the upcoming range-extended electric vehicles. Additionally, Xpeng has made layouts in five major areas: large computing power chips, AI models, AI cars, robotics, and flying cars. This year, the Turing AI chip is set to go into mass production for use in cars, flying cars, and robots.

NIO's R&D investment in 2024 will also reach a new high of 13.037 billion yuan, achieving results in chips, operating systems, and intelligent driving. Among them, NIO's self-developed Shenji chip will soon be installed in the ET9 and 2025 models, combined with the fully enhanced Tian Shu SkyOS universal operating system, significantly improving overall vehicle control efficiency. In the field of intelligent driving, NIO announced the key technology for end-to-end intelligent driving - the 'NWM' world model.

In the field of energy supplement, NIO continues to deepen battery swapping technology, advancing the battery swap county-to-county plan. According to the plan, NIO will achieve battery swap county-to-county service in dozens of provinces and cities in the first half of this year, and 27 provincial administrative regions will complete this by the end of the year.

Continuing to reduce costs and increase efficiency with a greater push in new product launches.

Despite the gradual emergence of scale effects with increased sales, the challenges of converting investments into market opportunities, while ensuring technological R&D and market expansion, effectively controlling costs, and improving operational efficiency, remain issues that three auto companies need to address.

As the currently most severely loss-making NIO, a series of adjustments have recently been made. In the conference call for NIO's 2024 Q4 Earnings Report on March 21, NIO Chairman Li Bin and the management further elaborated on how to reduce costs and increase efficiency. Li Bin stated that starting from the first quarter of this year, NIO will advance comprehensive cost reduction in R&D, supply chain, and sales services, implementing large-scale basic operating units to enhance the awareness of operational management among all employees and increase ROI.

In terms of vehicle platformization, the parts commonality rate of NIO will be improved, for example, the seat skeleton will be platformed, with NIO and Leida sharing the same skeleton platform, resulting in a 10% cost reduction; on the hardware side, for instance, unifying data interfaces, reducing costs from 2,000 yuan per vehicle to 1,000 yuan per vehicle. The ET9 Shenji 9031 chip will also be installed in the 5566 series, with self-developed chips providing a cost reduction of 0.01 million yuan per vehicle.

According to NIO's management, nine new models will be launched this year, with sales targets still not doubled. Among them, the NIO ET9 has started delivery, and the 2025 NIO '5566' model will hit the market in the second quarter, with a new product launching in the second half of the year that will significantly contribute to NIO's gross margin; the Leida L90 will debut in April, and the third product will be launched in the fourth quarter, both positioned at relatively high prices and high gross margins; the first model of the Firefly brand is planned for an April launch.

From the second quarter, improvements can be seen in the reports. Cost control will continue to deepen in the third quarter. We are confident in achieving the goal of profitability in the fourth quarter.

As a pioneer in organizational change and cost reduction through technology, Xiaopeng Motors has proposed a more long-term goal plan. Chairman He Xiaopeng shared Xiaopeng's "three growth curves" during the Earnings Reports conference call for the fourth quarter of 2024: AI + Autos, expanding from the China market to Global markets, humanoid robots, and a deeper integration with the automotive industry. "I envision a future where Self-Driving Cars operate within cities, flying cars are used for intercity transport, and humanoid robots are introduced in factories and residential areas, creating a future mobility ecosystem centered around AI," He Xiaopeng stated.

"By launching more competitively advanced products and Global expansion, I believe that Xiaopeng Motors' total sales in 2025 will achieve more than double growth compared to 2024. Through improved Operation capabilities, cost reduction in technology, and greater economies of scale, we expect the gross margin of Autos to continue to improve this year," He Xiaopeng emphasized again, "Xiaopeng Motors will be profitable in the fourth quarter of this year."

Li Auto plans to accelerate its transition to fully electric in 2025, launching two brand new pure electric SUV models to expand its market share. Chairman Li Xiang disclosed during the earnings reports conference call for the fourth quarter of 2024 that Li's first pure electric SUV model, the i8, will be released in July, while the i6 will be launched in the second half of this year.

Alongside the imminent market launch of pure electric models, Ideal is also accelerating the construction of its charging network. According to the plan, 2,500 supercharging stations will be available when the i8 is launched, and this will increase to 4,000 by the end of the year.

Regarding intelligent driving, Li Xiang revealed during the Earnings Reports conference call that the company is developing the next generation VLA (Vision-Language-Action) large model for intelligent driving, with plans to launch it simultaneously with the i8. The L series and MEGA will also unveil new versions of intelligent driving this year.

Similar to Xiaopeng, the overseas market has become another important layout for Li Auto to further expand its sales. Li Auto's management stated, "In the past year, the company has established its own after-sales service centers in markets such as Kazakhstan, Uzbekistan, and the UAE, and is increasing its expansion in the Middle East, Latin America, and Asia Pacific markets with various cooperation methods to accelerate the establishment of overseas sales and service networks."

Editor/jayden