On the evening of August 29, Great Wall Motor Company Limited (601633.SH) released its 2025 interim report, showing revenue of 92.335 billion yuan for the reporting period, up 0.99% year-over-year, while net profit attributable to shareholders reached 6.337 billion yuan, down 10.21% from the previous year.

The mere 0.99% revenue growth raises questions about whether Great Wall Motor is approaching a critical inflection point in income growth, which will require further validation from second-half data. Alternatively, given the company's exceptionally strong 2024 financial performance, Great Wall Motor may be choosing to deliberately slow its pace in this endurance race of automotive manufacturing—taking a breather, regrouping, and building strength for a more sustainable sprint ahead.

**Surging Sales Expenses and Weak R&D Investment**

In the first half of 2025, Great Wall Motor delivered results showing marginal revenue growth of 0.99% while net profit declined by over 10%. After excluding non-recurring items such as government subsidies, the company's adjusted net profit was only 3.581 billion yuan, a substantial 36.39% decrease year-over-year.

This represents a stark contrast to last year, when Great Wall Motor's net profit surged 80.76% year-over-year, with profitability trailing only BYD and Geely Automobile.

In fact, signs of pressure on Great Wall Motor's profitability emerged in the first quarter of this year. The Q1 report showed revenue of 40.019 billion yuan, down 6.63% year-over-year—the first decline in seven quarters. Net profit attributable to shareholders was 1.751 billion yuan, plummeting 45.6% year-over-year, while adjusted net profit was 1.469 billion yuan, down 27.12%.

The second quarter showed improved performance, with revenue of 52.316 billion yuan, up 7.72% year-over-year and 30.73% quarter-over-quarter. Net profit attributable to shareholders reached 4.586 billion yuan, up 19.42% year-over-year and 161.87% quarter-over-quarter.

Against the backdrop of BYD and Geely Automobile achieving substantial revenue growth in the first half, with net profits of 15.511 billion yuan and 9.290 billion yuan respectively, Great Wall Motor—another leading private automotive company—appears to be falling behind.

Notably, Great Wall Motor's gross margin declined 7.83 percentage points year-over-year to 18.38% in the first half, while net margin decreased 11.1 percentage points to 6.86%. Sales expenses surged 63.31% to 5.036 billion yuan, which the company attributed mainly to accelerated construction of new direct-to-consumer channel models and increased marketing for new vehicle models, new technologies, and brand enhancement.

Meanwhile, Great Wall Motor's R&D investment remained weak. First-half R&D expenses totaled only 4.239 billion yuan, up just 1.21% year-over-year, significantly lower than BYD's 30.88 billion yuan and Geely Automobile's 7.328 billion yuan for the same period.

**New Energy Penetration Rate Far Below Industry Average**

Great Wall Motor is not obsessed with sales volume growth. During a September 2024 livestream, Chairman Wei Jianjun stated, "Great Wall Motor isn't afraid even if sales fall out of the top ten, because we want healthy development. We'd rather do less and have a smaller market share than pursue meaningless sales volume."

This wasn't Wei Jianjun's first public questioning of the "sales-first" philosophy. His reiteration of this viewpoint was backed by clear practical considerations—in the first eight months of 2024, Great Wall Motor sold approximately 745,400 vehicles, up only 0.4% year-over-year, lagging behind the industry's overall 3% growth rate. This trend continued throughout 2024, with Great Wall Motor's total sales essentially flat compared to 2023.

Entering 2025, Great Wall Motor's sales situation has improved. The financial report shows cumulative sales of 568,900 new vehicles from January to June 2025, up 2.52% year-over-year. New energy vehicle sales totaled 160,400 units, up 23.64% year-over-year.

While this data appears impressive in isolation, problems emerge when viewed within the broader industry context. In the first half, domestic new energy vehicle production and sales reached 6.968 million and 6.937 million units respectively, up 41.4% and 40.3% year-over-year. Great Wall Motor's new energy sales accounted for only 2.31% of the national market, with new energy vehicles comprising just 28.2% of its total sales—far below the industry's 44.3% penetration rate for the first half.

The new energy sector has now entered a phase of scale competition. BYD's sales exceeded 2 million units in the first half of this year, while Geely's new energy sales surpassed 700,000 units. Great Wall Motor's new energy sales remain at the hundreds of thousands level.

This is closely related to Great Wall Motor's focus on off-road vehicle products. For hardcore off-road enthusiasts, most still prefer pure gasoline vehicles with simpler structures and stronger reliability, which naturally affects the rapid adoption of new energy models to some extent.

However, it must be acknowledged that insufficient scale directly limits the company's bargaining power in the supply chain and weakens its cost-spreading advantages. While Great Wall Motor has a comprehensive product line, it lacks sufficient market volume to create overwhelming cost advantages.

**Entering the Ultra-Luxury Vehicle Market**

As an automotive company with 35 years of history, Great Wall Motor's main business covers R&D, production, and sales of complete vehicles and core components. The company owns multiple brands including Haval, WEY, TANK, ORA, and Great Wall Pickup, with products covering SUVs, pickups, new energy vehicles, and other market segments.

Standing at a critical transformation juncture, Great Wall Motor seeks to quickly enter the ultra-luxury vehicle market. On August 20, Great Wall Holdings Procurement Center published information for the "Great Wall Motor Ultra-Luxury Car BG Brand User Activity Project," globally recruiting suppliers with ultra-luxury brand service experience and excellent social media operation capabilities to serve Great Wall Motor's ultra-luxury car BG and assist in user activity planning and execution.

In fact, Great Wall Motor's "luxury dream" can be traced back to 2021, when its high-end off-road brand "TANK" completed its independent spin-off from the Haval brand and quickly established a foothold in the market with its unique positioning. The TANK brand has now become the main force in Great Wall Motor's brand upgrade efforts. However, TANK's main products are currently priced around 300,000 yuan, still distant from the million-yuan mark.

In January this year, Great Wall Motor announced its 2025 first appointment, establishing the new "Great Wall Brand Ultra-Luxury Car BG" department, with Group Chairman Wei Jianjun serving as the new brand's chairman, former Technical Vice President Song Dongxian as CEO, and Zhang Xiaobo as CTO. The new brand is positioned above Great Wall Motor's existing brands, focusing on hybrid and other new energy products, with vehicle planning including supercars and sedans.

Great Wall Motor's foray into ultra-luxury vehicles is undoubtedly another major move in its continued push toward the high end. Compared to ordinary vehicle models, ultra-luxury cars have stronger pricing power and are expected to bring Great Wall Motor greater financial returns.

"For automotive companies, million-yuan level vehicles serve more as flagship models for brand elevation rather than pursuing high sales volumes," noted an automotive analyst. "When domestic brands launch million-yuan luxury cars, it's mainly to prove that Chinese automotive companies can also produce million-yuan luxury vehicles, which validates both the company's technical capabilities and manufacturing prowess."

However, building an ultra-luxury brand clearly requires massive investment. Looking at financial data, as of the end of June, Great Wall Motor held 28.009 billion yuan in cash and cash equivalents, down from 30.741 billion yuan at the end of last year. At this time, Great Wall Motor's development of the BG brand may bring greater financial pressure, and small-batch production leads to high unit costs, making the balance between cost and profit a major challenge.