Chinese EV Makers Narrow Losses Amid Price War

Chinese EV makers are under growing pressure to cut losses as price competition continues in the world’s largest auto market.

In Q2 2025, Nio, Xpeng, and Geely’s Zeekr reported narrower deficits, though profitability remains elusive. Nio’s loss fell 26 percent to 5.0 billion yuan (US$699M), Xpeng’s shrank two-thirds to 480 million yuan (US$67M), and Zeekr’s plunged 88 percent to 290 million yuan (US$40.6M). Industry experts warn that listed EV firms must control losses amid overcapacity, investor caution, and limited funding. Despite massive production capacity of 20 million EVs annually, only half was used last year, signaling inefficiency. Aggressive discount wars persist, though average price cuts narrowed to 16.7 percent in July 2025.

Key Highlights

• Nio, Xpeng, and Zeekr cut Q2 losses but remain unprofitable
• Overcapacity drives discount wars, with only 50 percent utilization
• Fewer than 10 percent of China’s EV brands expected to profit by 2030

While Li Auto has been profitable since 2023 and Leapmotor, backed by Stellantis, posted a profit in H1 2025, fewer than 10 percent of EV brands are expected to be profitable in the next five years. Currently, only Tesla, BYD, Li Auto, and Series Group are consistently profitable among EV-exclusive manufacturers.

Nio aims to deliver 50,000 EVs per month in Q4 to reach breakeven, but analysts argue that overproduction and lack of differentiation limit pricing power. The situation mirrors China’s solar industry, which faced a boom-bust cycle from overcapacity and subsidy dependence.

Also Read: Vietnam's GSM Expands EV Ride-Hailing Across Southeast Asia

As government support shifts from subsidies to mandates, the market is entering a consolidation phase, where only vertically integrated players with scale and technology advantages are likely to survive.