Finished Electric Vehicles

What it is

The finished car is the last stage of the chain, assembled from battery cells, electric drive systems and thermal management parts, with the upstream materials behind them. China's new-energy vehicle (NEV) category covers battery-electric and plug-in hybrid cars.

The market in the first half of 2026

China's NEV output and sales were 7.438 million and 7.446 million, up 6.7% and 7.3%, and domestic NEV penetration of new sales passed 60% in some months (BYD 2026 interim report, p. 12). Geely cites industry data that domestic passenger vehicle sales fell 24.3% to 8.29 million, with domestic NEV sales down 16.8% to 4.59 million and NEV penetration up 5.9 points to 54.2%, while exports of passenger cars rose 71.7% to 4.43 million and of NEV passenger cars 127.7% to 2.30 million (Geely 2026 interim results, pp. 48, 49). So the domestic market contracted and exports carried the growth.

The makers

Six listed makers show how that played out:

• BYD (比亚迪) revenue fell 7.1% to ¥344.8bn. Revenue from mainland China fell 30.7% while overseas revenue rose 33.9% to ¥181.3bn, 52.6% of the total. Exports were 792,000 vehicles, up 67.8%, and its vehicle business earned a 22.33% gross margin (BYD pp. 14, 26).
• Geely Auto (吉利汽车) sold 1,422,958 vehicles, up 1%, with NEVs up 10% to 799,454 and exports up 158% to 474,228, about a third of its volume (our calculation). Its gross margin was 17.9% (our calculation, Geely pp. 3, 49, 51).
• Leapmotor (零跑汽车) delivered 356,487 vehicles, up 60.8%, with exports of 96,294, up 372.6%. Its gross margin fell 2.4 points to 11.7%, which it blames on raw material costs and mix (Leapmotor 2026 interim results, p. 2).
• XPeng (小鹏汽车) delivered 103,295 vehicles in the second quarter on revenue of ¥19.74bn, up 8.0%, and is also building a humanoid robot.
• NIO (蔚来) delivered 107,658 vehicles in the second quarter, up 49.4%, with a vehicle margin of 18.5% against 10.3% a year earlier, and cut its net loss to ¥528m (NIO Q2 2026 results).
• Li Auto (理想汽车) delivered 98,330 vehicles in the second quarter, down 11.5%, with a vehicle margin of 9.4% against 19.4% and a net loss of ¥1.71bn (Li Auto Q2 2026 results).

The reporting periods differ, since NIO, Li Auto and XPeng publish quarterly results, so volumes should not be compared across the list.

Margins and costs

Gross or vehicle margins reported in the half range from 9.4% (Li Auto's vehicle margin) to 22.33% (BYD's vehicle business), with Geely at 17.9%, NIO at 18.5% and Leapmotor at 11.7%. Leapmotor says rising raw material costs cut its margin, which links the finished car back to lithium and cathode prices; see lithium and cathode materials.

Our view: the carmakers are splitting into those that are growing abroad and holding margins (BYD, Geely, NIO this quarter) and those that are not. Li Auto's volume and margin both fell and Leapmotor's growth came with a lower margin. With the home market shrinking, the first half shows export growth, not domestic growth, deciding the results.

What to watch

• Exports. BYD, Geely and Leapmotor all report export growth of more than 60%, and trade rules in destination markets would change that.
• Raw material costs. Leapmotor ties its margin fall to them; lithium prices moved by more than 70% within the half.
• Quarterly updates. NIO and Li Auto guide to third-quarter deliveries of 108,000 to 111,000 and 95,000 to 100,000 vehicles.