Huawei and Li Auto Compete for the Top Spot Amid Cutthroat Competition Among...

TMTPOST--The new energy vehicles (NEVs) market recorded impressive results in June. As of Tuesday, the sales data of 16 emerging NEV brands showed a flourishing market in the first half of 2024, with only two brands experiencing negative growth.

Among the 16 emerging NEV carmakers, 11 recorded sales exceeding 10,000 units in June, compared with nine such automakers in May. Additionally, the number of brands with monthly sales surpassing 20,000 units increased to six, with Zeekr and Leapmotor joining the ranks. Furthermore, two brands, HarmonyOS Auto and Li Auto, sold over 45,000 units.

However, in terms of annual sales target completion, none of the companies achieved over 50% completion in the first half of the year, with most hovering around 30%. This indicates that despite strong sales performance in the first half, there is still a considerable gap to narrow for the annual targets, suggesting potentially growing competition in the second half.

Huawei and Li Auto Compete for the Top Spot

Li Auto led the pack in June, delivering 47,774 new cars, a 46.7% year-on-year increase, marking a return to nearly 50,000 units per month after six months.

On the other hand, Huawei's HarmonyOS Auto was in the spotlight in the first half of the year. Although falling behind Li Auto in June with 46,141 units delivered (an 803% year-on-year increase), HarmonyOS Auto's outstanding performance throughout the first half enabled it to deliver 192,000 new cars, topping the sales among emerging NEV brands. In the ongoing competition with Li Auto, Huawei managed to take the lead for the first half of the year.

However, Huawei and Li Auto adopt different strategies for achieving their success.

Huawei is shifting its focus to the high-end market. It delivered 17,241 units of AITO M9 in June, which is priced above 500,000 yuan, accounting for 36% of HarmonyOS Auto's total deliveries. It exemplifies a successful model that balances profitability and sales volume. HarmonyOS Auto's next high-end model, the AITO S9, priced between 450,000 and 550,000 yuan, is set to be launched in August.

Richard Yu, the CEO of Huawei Consumer Business Group, previously said that selling HarmonyOS Auto models for less than 300,000 yuan generally results in losses. Recently, Yu disclosed that the average price of HarmonyOS Auto's models is 390,000 yuan, with over 90% of sales priced above 300,000 yuan.

In contrast, Li Auto's L9, once a representative model priced above 400,000 yuan, has seen its monthly sales drop below 10,000 units due to intensified market competition this year. To retain market share, Li Auto has started targeting lower-end segments, launching the Li L6 starting at 249,800 yuan.

The strategy proved effective as Li Auto's monthly sales climbed since the L6's launch to nearly 50,000 units in June, with the L6 leading the way. The L6 sold over 20,000 units in June, replacing the L9 and L7 as the new sales pillar for Li Auto.

Both HarmonyOS Auto, which is doubling down on high-end models, and Li Auto, which is moving downward, have found their keys to market success. Whether their strategies can sustain long-term market advantages remains to be seen.

Emerging Automakers Striving to Deliver 20,000 Units

After NIO's re-reached the goal of delivering 20,000 units in May, more brands have joined the ranks in June. Besides NIO, Zeekr and Leapmotor also delivered over 20,000 units.

NIO, Zeekr, Leapmotor, and DeepBlue have recorded continuous sales growth. NIO leveraged its BaaS (Banking as a Service) policy adjustment in March and upgraded its 2024 models to get back on the growth track.

Zeekr benefited from its product upgrade early in the year, launching new models like the Zeekr 007 and a mid-term facelift of the Zeekr 001. The Zeekr 001, in particular, has become a popular model with nearly 15,000 units sold monthly due to enhanced product competitiveness and significant price reductions.

Leapmotor and Deepal have found success with their range-extended products. Leapmotor followed its competitors' path by launching new, competitive products at half the price of its rivals, attracting consumers with product strength and value. Deepal's main models, the SL03 and S7, are also competitive in the market, priced starting at 124,900 yuan and 134,900 yuan, respectively.

NIO, Zeekr, Leapmotor, and Deepal each sold over 80,000 units in the first half of the year, averaging nearly 15,000 units per month—a remarkable achievement in today's competitive market.

While these four brands represent the ones thriving, others like Aion, Neta, and XPeng are facing varying degrees of challenges.

Aion and Neta were the only two brands to record year-on-year declines in June. Aion's struggles stem from its lackluster performance in the high-end market and the saturation of the ride-hailing market, which had been its primary sales contributor.

Neta has been unable to reverse its sales decline since last year despite launching new models like the Neta S and Neta GT aimed at the mid-range market.

XPeng's sales performance remains lukewarm. In June, it delivered 10,668 new cars, showing growth in various dimensions but still lagging behind its peers like Li Auto and NIO.

As a representative of emerging NEV brands, XPeng has always emphasized its strengths in intelligent driving. The challenge for XPeng is how to translate its expertise in smart technology into tangible sales.

Aion, Neta, and XPeng are all experiencing growing pains, while brands like Arcfox, IM Motors, and Voyah are still striving to exceed monthly sales of 10,000 units. These brands, backed by major traditional carmakers, are recognized for their technical capabilities and manufacturing prowess but continue to remain sluggish in sales.

NEV Automakers All Lag Behind Mid-Year Target

This year's first half saw intense competition and fierce price wars.

According to statistics compiled by TMTPost, none of the 18 NEV automakers achieved over 50% of their 2024 sales targets in the first half. BYD and Geely had the highest completion rates at 44.6% and 47.8%, respectively. BYD sold 1.61 million cars, completing 44.6% of its annual target of 3.6 million units. Geely sold 956,000 units, achieving 47.8% of its annual target, the highest among all car companies.

Among the emerging NEV brands, none exceeded a 40% completion rate for their annual targets. Li Auto, Zeekr, NIO, Voyah, and Avatr surpassed 30%, with Zeekr and NIO leading at 38.2% and 38%, respectively. Li Auto completed 33.7% of its annual target.

Neta, XPeng, Xiaomi, and IM Motors had completion rates below 20%, with Neta at the bottom, achieving only 17.9% of its annual target. Xiaomi completed 21.4% of its annual target. If Xiaomi's annual target is 100,000 units, the figure comes to 25.7%, still below 30%. To meet its annual target, Xiaomi needs to deliver nearly 13,000 units per month for the remaining six months of 2024.

As the mid-year performance reports show, automakers face mounting pressure to hit their annual KPIs. As market competition in the second half of the year becomes more intensified, automakers face an uphill battle.