The automotive industry's semi-annual reports have been released, revealing the most authentic picture of this year's automotive sector. In the first half of this year, mainstream automakers achieved strong sales growth and rising revenues, but overall profits failed to improve significantly.

According to statistics, 14 mainstream automakers sold a combined 11.02 million vehicles in the first half, representing a 14.7% year-over-year increase. Their combined revenue reached 1.39 trillion yuan, up 12.1% year-over-year. However, in terms of net profit, automakers showed mixed results with most experiencing declining profits. The combined earnings totaled 25.573 billion yuan in the first half, down 21.0% year-over-year.

More directly stated, the three most profitable companies in the automotive sector—BYD, Great Wall Motors, and Geely—combined their profits barely match Contemporary Amperex Technology Co., Limited (CATL) alone. Are all these automakers really just working for the "battery king"?

**Semi-Annual Report Results: Top Three Profitable Automakers Match One "Battery King"**

With the "Golden September" season upon us, mainstream automakers have released their first-half financial reports. Among the 14 listed passenger vehicle-focused companies analyzed, the industry showed intriguing trends.

In terms of sales, almost all mainstream automakers achieved varying degrees of growth. Among domestic and traditional brands, BYD and SAIC remained absolute leaders, with both surpassing 2 million units in the first half, growing 33% and 12.4% respectively year-over-year.

Geely jumped from fifth place last year to third, with first-half sales of 1.4092 million units and the highest growth rate among domestic brands at 47%. Changan, BAIC, and Great Wall Motors also achieved sales increases, selling 1.3553 million, 817,000, and 569,800 units respectively.

Among new energy vehicle brands, Leapmotor was undoubtedly this year's biggest dark horse, delivering 221,700 units cumulatively in the first half, becoming the new energy sales champion with a 155.7% year-over-year increase. XPeng and Xiaomi Auto also showed remarkable growth, increasing 279% and 134.20% respectively year-over-year, selling 197,200 and 157,200 units respectively.

NIO and Li Auto delivered 114,200 and 203,900 units respectively in the first half, with year-over-year growth of 30.60% and 7.90%.

The 14 automakers/brands delivered approximately 11.02 million new vehicles in the first half, up 14.7% from 9.608 million units in the same period last year.

Sales growth also drove overall revenue increases for automakers. The top three revenue-generating companies maintained the same ranking as last year: BYD, SAIC, and Geely, with first-half revenues of 371.28 billion yuan, 299.588 billion yuan, and 150.285 billion yuan respectively, representing year-over-year growth of 23.30%, 5.20%, and 26.50%.

The three companies with the highest revenue growth rates belonged to new energy brands: Xiaomi Auto, Leapmotor, and XPeng. Xiaomi Auto showed the fastest revenue growth, with automotive division revenue of 20.6 billion yuan in the first half, surging 232.30% year-over-year. XPeng and Leapmotor generated revenues of 34.08 billion yuan and 24.25 billion yuan respectively, growing 132.50% and 174.30% year-over-year.

The 14 automakers/brands achieved combined revenue of 1.39 trillion yuan in the first half, up 12.1% from 1.24 trillion yuan in the same period last year.

However, unlike the strong performance in sales and revenue, most automakers experienced significant profit declines. Using net profit attributable to shareholders as the reference indicator, among the 14 automakers/brands, only BYD, Seres, and Li Auto saw net profit increases. Leapmotor turned profitable in the first half, while XPeng and Xiaomi Auto significantly narrowed their net losses.

Most other automakers experienced varying degrees of decline in net profit or increased net losses. The combined net profit of the 14 companies was approximately 25.573 billion yuan in the first half, down significantly from 32.386 billion yuan in the same period last year, a decrease of 21.0%.

The three most profitable automakers—BYD, Geely, and Great Wall Motors—achieved net profits of 15.51 billion yuan, 9.29 billion yuan, and 6.337 billion yuan respectively. Combined, these three giants earned 31.137 billion yuan in net profit.

However, looking at the broader automotive industry chain, the combined profits of the three most profitable automakers barely matched CATL alone—the "battery king" achieved net profit of 30.49 billion yuan in the first half, equivalent to earning 168 million yuan daily.

To put this in perspective, if building a battery swapping station costs 3 million yuan, CATL's daily earnings could fund 56 such stations.

Comparing market capitalizations, BYD (955.8 billion yuan), Geely (169.8 billion yuan), and Great Wall Motors (149.6 billion yuan) have a combined market cap of approximately 1.28 trillion yuan, still less than CATL's current 1.75 trillion yuan valuation.

Is selling cars really less profitable than selling batteries? Are automakers ultimately just working for the "battery king"? The reality may be more complex.

**Is Selling Cars Really Less Profitable Than Selling Batteries?**

This disparity isn't simply a matter of "automakers being less profitable than upstream battery giants." The primary factor is their completely different profit models.

CATL's profits primarily stem from technological barriers and industry leadership position. With the unstoppable new energy trend and rising penetration rates, batteries are an unavoidable topic. Many automakers without the resources to manufacture batteries in-house must choose suppliers when they need batteries.

CATL, as an energy and technology company, has gradually built unique industry advantages and reputation through years of technological and product accumulation, becoming the preferred battery choice for many mainstream automakers. This established CATL as the world's leading power battery supplier and undisputed industry leader.

Therefore, CATL enjoys not only economies of scale but also strong pricing power, ensuring stable gross margins despite raw material fluctuations and market competition.

Automakers operate completely differently. Car manufacturing is a capital-intensive business requiring heavy investment in R&D, production, marketing, and distribution channels. Automaker profits depend more on scale, brand recognition, and cost control.

Moreover, when new forces enter an industry, periods of turbulence and competition are inevitable before industry transformation and market stabilization. In highly competitive markets with diverse consumer preferences, profit margins are difficult to maintain steadily, making market dominance impossible.

The current comprehensive arrival of the new energy era has brought unprecedented competition to the automotive sector. Despite continuous market reshuffling over recent years, numerous players remain in the game. New energy brands, joint venture brands, domestic brands, and cross-industry players all hope to gain pricing advantages in virtually every market segment.

Under such circumstances, automakers prioritize sales volume over profits. Scale is the prerequisite for survival; only by achieving scale can companies reduce unit costs and survive competitive cycles.

In other words, automaker profits are being collectively compressed not due to insufficient profitability capabilities, but because the automotive industry remains in a "battle phase" where companies trade profits for market share and economies of scale.

Of course, the current "price-for-volume" strategy among automakers is recognized as unsustainable, but no one has escaped this vicious cycle.

Making money in the automotive sector is challenging—unless you're the battery king.