Geely's integration wraps up, aiming for domestic number one.

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Author | Zhou Zhiyu

Geely wants to achieve the top spot in China's passenger car sales this year.

On March 18, at the Geely Automobile 2025 annual report performance meeting, Geely Automobile Holdings Limited CEO and executive director Gui Shengyue said, "In 2026 we strive to achieve the top domestic sales in China."

Looking at all categories, last year's top spot was held by BYD, with about 3.55 million vehicles domestically in 2025. Geely had 3.025 million, a gap of 530,000 vehicles. Changan and Chery behind are also accelerating. The top four Chinese independent brands are all approaching the 3 million vehicle threshold, while multiple institutions predict that the overall market growth in 2026 will drop to low single digits.

Gui Shengyue's confidence comes from a fact that's happening: at the start of 2026, Geely has occupied the number one position in China's passenger car sales for two consecutive months.

The logic for growth in China's car market over the past few years was that the penetration rate of new energy vehicles expanded the overall market— the cake got bigger, most players could get incremental shares. In 2026 this logic begins to fail. The China Passenger Car Association predicts the whole year may be flat with 2025; the China Association of Automobile Manufacturers forecasts only a 1% increase. As the growth bonus fades, the Chinese car market is entering the first half of the game for transition speed, shifting to the second half for system efficiency. Each car manufacturer must now show real capabilities at this point.

New Energy Doubles

Geely dares to declare "Number One in China" thanks to a doubling explosion in new energy sales in 2025.

Full-year new energy sales were 1.688 million vehicles, up 90%, with the share of total sales jumping from 37% to 56%. Second only to BYD, globally ranked second. Two years ago this figure was less than 500,000.

The main force is Geely Galaxy. 1.236 million units, a 150% increase, achieving a million annual sales in 29 months. Geely Xingyuan became number one in all-category passenger car sales for the year, and Galaxy M9 entered the top three large and midsize SUVs from launch in September to year-end.

This speed shows one thing: the layout of the mainstream new energy market in the 100,000 to 200,000 yuan price range has not solidified. In 2025 nearly 7 million new energy vehicles were sold in this price band, a 24% increase, making it the fastest growing area of the entire market. Galaxy skyrocketed from 490,000 a year ago to 1.24 million, showing consumers have not locked brand loyalty. Whoever has faster product cycles and more accurate cost-performance can cut out market share.

Zeekr takes a different route. Full-year sales were 224,000— not big, but in Q4 with Zeekr 9X launched, quarterly sales broke 80,000. Geely Auto Group CEO Gan Jiayue told WallstreetCn that the Zeekr 9X delivery cycle is expected to shrink from 11 weeks to 8 weeks. The Zeekr 8X presale began March 16, "in less than 48 hours, orders have already exceeded 30,000 units."

The value of Zeekr is not in volume, but profit. The brand's Q4 gross margin was 23%, and Zeekr 9X's single vehicle gross margin approached 40%. Geely Auto Group CFO Dai Yong said Zeekr's Q4 sales share rose from 7.5% for the full year to 9.5%, directly lifting the overall gross margin to 16.9%. For reference, Chery's full-year gross margin is 13.8%, NIO’s 13.6%.

The Chinese car market is entering a new stage: the price war has been fought for years, costs are squeezed to the bone, and there's limited room for further price reductions. Next the competition is about who can provide higher product value for the same price, and who can boost profit margin with high-end products. Zeekr 9X’s nearly 40% gross margin is Geely’s trump card in this profit battle.

Combustion vehicles are not abandoned. The China Star brand achieved 1.214 million sales for the year, growing against a market backdrop that fell 4.6%. Gui Shengyue stated an argument more than once: "For a long time in the future, car companies with multiple energy types coexisting will be the most valuable." The target of this remark is self-evident.

Hundred-billion Integration Bill

Aside from selling cars, Geely's biggest move in 2025 was restructuring itself.

Zeekr privatization: announced in May, completed in December, less than eight months, at a cost of about 17 billion yuan. Acquisition of 50% shares in Lynk & Co, 9.5 billion yuan. Combined, they total 26.5 billion yuan— nearly double the core profit for the year of 14.4 billion. Total borrowing jumped from 7.6 billion to 18.3 billion, capital debt ratio increased from 8.8% to 19.8%.

Gui Shengyue raised this to the level of organizational capability: "In the fiercely competitive automotive industry, Geely has shown courage, determination, and efficiency in responding to changing situations."

Operating cash generation can support this cost. Full-year operating cash flow was 47.3 billion, end-of-year total cash was 68.2 billion, net cash after loans was 49.9 billion.

Why spend such a high cost on integration at the most competitive time? Because the competition dimensions in the Chinese car market are changing.

For the past three years, the theme was "new energy replacing fuel," competing on transformation speed, product variety, and distribution volume. The new theme is shifting to "system efficiency"— can R&D resources be reused across brands, can the supply chain negotiate in bulk, can channels be shared?

Previously, Geely's three brands operated independently— Galaxy, Lynk & Co, and Zeekr had their own R&D, purchasing, and sales systems, with inevitable duplicate investment. The purpose of integration is to eliminate this internal friction.

Geely Holdings Group CEO An Conghui gave a quantitative example: Geely Holdings and Volvo achieved 5 billion yuan in benefits last year just through procurement synergy. "Without Volvo’s help and support, could Geely’s safety improve so fast?" He said Zeekr 9X's performance is also inseparable from Lotus's chassis tuning.

This is the fundamental difference in path between Geely and BYD. BYD’s competitiveness comes from vertical integration— battery, motor, chip self-developed and self-produced, squeezing costs to unreachable levels. Geely’s route is horizontal integration— Volvo, Lotus, Proton, Hoss Power, Renault JV, an Eurasian-crossing brand and technology ecosystem. These assets were cost burdens before integration; after integration whether they turn into competitiveness, the 5 billion procurement synergy is the first quantifiable answer. But compared to BYD’s structural advantage in costs, this is only the beginning.

Dai Yong uses expense ratios to supplement: sales expense ratio fell to 5.9%, R&D investment ratio declined to 6.3%. Total annual R&D input was 21.9 billion up 8.3%, but revenue grew faster.

One detail worth pulling out:

Geely’s R&D expense capitalization rate (portion of current R&D investment directly booked as expenses) rose from 31% in 2024 to 36% for the full year in 2025, and even hit 43% in Q4 alone. Dai Yong said the 2026 target is to keep above 40%. "Let profits be of higher quality."

This change explains a contradiction investors may notice: gross margin rose to 16.9% in Q4, but overall profitability did not evidently improve. The reason is the jump in R&D expense capitalization rate, with Q4 R&D expense reaching 5.9 billion, nearly 50% higher than the approximately 4 billion per quarter in the previous three quarters. Profits are deliberately "pressed down" by a portion.

A low capitalization rate has been a typical criticism for Chinese carmakers in recent years— capitalizing large chunks of R&D expenses, making short-term profits look good, but amortization pressure damages future reports. Geely’s voluntary increase means choosing to bear pressure on current profits for cleaner future statements. This choice is also an expression of confidence in underlying profitability.

Net profit attributable to parent was 16.85 billion, up only 0.2%— distorted by the 9.35 billion Hoss Power deconsolidation gain in 2024. Excluding that, core scale net profit was 14.41 billion, up 36% year-on-year.

Fixing the Weak Links

Gui Shengyue spent a long time at the performance meeting discussing the industry.

He did not avoid problems, actively pointed out three weaknesses: brand building, overseas scale, customer service. Then he pointed to the industry: "There has emerged a blind pursuit of 'speed' in China’s new energy market. Many misleading marketing claims are shocking, some companies cut costs without regard to vehicle safety to manufacture cars."

This statement is strong, but points to a real industry inflection point. In the past three years, competition among Chinese new energy car companies was speed- and price-centric— who launches faster, who prices lower, whose marketing is louder. This approach worked in an expanding market, as new users flowed in and mistakes were not costly.

When the market moves to stock competition, and users start buying their second or third new energy car, the weight of "slow variables" like safety, quality, and aftersales will rise rapidly.

Gui Shengyue listed the construction of the world’s largest automotive safety center in 2025 as the year’s top five events. "Whether it’s a luxury car worth hundreds of thousands or millions, or a mass market product for the public, Geely will put them through the same rigorous testing standards."

On smart technology, he set a benchmark: "Geely's autonomous driving is expected to reach Tesla FSD level within this year." The day before earnings release, NVIDIA CEO Jensen Huang showcased AI physical applications at the GTC conference, using Geely vehicles.

But if one must point out Geely’s clearest shortcoming— it’s exports.

This weakness is especially glaring with the industry trend. In 2025, China’s car exports were 7.1 million units, up 21%. Overseas markets have shifted from “icing on the cake” to the main growth driver for leading carmakers— nearly half of Chery’s sales come from overseas, BYD’s overseas breakthrough of a million vehicles was last year’s most crucial growth story. As the domestic market becomes a red ocean of competition, overseas is one of the few incremental areas left.

Gan Jiayue did not dodge the issue at the performance meeting. "In 2026 the group will prioritize all resources for international business." Plans for over 1,300 overseas stores within the year, Galaxy’s top-selling products go global, Lynk & Co leverages Volvo channels in Europe for volume. Exports have consecutively exceeded 60,000 units in the first two months of 2026, up 129% year-on-year.

Geely previously disclosed an overseas target of 640,000 units; Gui Shengyue revealed this year’s internal challenge target of 750,000.

Geely has Proton, a Renault Brazil JV, and Volvo’s European resources. These assets are not held by other independent brands, but so far have not truly translated into export scale. 2026 is the key year to test whether these assets can transform from “strategic layout” to “real sales.”

The annual target of 3.45 million vehicles is only up 14%, capital expenditure budget of 16 billion is less than last year’s actual 17.9 billion. Expansion pace is slowing, efficiency weight rising.

At the end of the performance meeting, Gui Shengyue said: "We have built the most comprehensive science and technology ecosystem among Chinese car companies. From cockpit, autonomous driving, chips, batteries, to future mobility, which company besides Geely has such a well-rounded layout?"

Two and a half years ago he said at a performance meeting: every financial report in the future would be a new sales milestone. In 2025, this was realized.

"In all likelihood, every financial report in the future, core scale net profit will be a new historical high." This is the new promise.

Next up, they must deliver domestic number one. Can integration dividends be released in time, can exports turn from a 14% weakness to a growth engine, and after competition shifts from incremental growth to stock competition, is Geely’s system capability strong enough in China’s car market? The answers will be seen in 2026.

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