As 2024 draws to a close, the current trends in the Chinese electric vehicle (EV) market have stirred significant interest, especially with the release of the final sales figures for the yearAt the forefront of this surge is BYD, once again establishing itself as the unparalleled leader in new energy vehicle sales for DecemberFollowing closely behind is Geely, which has emerged as a formidable contender in the sector, even expanding its stake in recent investor partnerships.

In December alone, Geely reported a staggering 111,206 units sold in the new energy sector, marking an impressive growth rate of 93% compared to the previous yearBy the end of 2024, the total sales for Geely in this category soared to an impressive 888,200 units, which translates to a year-on-year increase of nearly 92%, resulting in a market penetration rate of approximately 41%. This remarkable performance positions Geely as a strong player in the evolving landscape of electric mobility.

However, while the headline figures highlight Geely’s robust performance in 2024, a deeper analysis reveals potential challenges that could hinder its long-term ambitions in the new energy domain

Despite the current sales boom, concerns about product quality and a historical perception as a mid-range brand may obstruct Geely’s aspirations to ascend further in the market hierarchy.

One cannot ignore the irony underlying Geely’s ambitious goals in the new energy sectorHistorically, as one of the early pioneers in the Chinese automotive landscape, Geely made waves with its bold claim stating that it aimed to accommodate the average consumer's desire for affordable carsThis vision was instrumental in Geely's meteoric rise; by 2018, the company was reporting annual revenues exceeding a staggering CNY 100 billion.

However, the face of the automotive market has shifted rapidly since thenFollowing 2018, the electric vehicle market began to expand rapidly, changing the competitive dynamicsThe consumer base is now significantly younger, with purchases increasingly driven by brand perception and value rather than mere affordability

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Consumers are willing to pay a premium for brands that resonate with their identity and values, a shift that Geely has struggled to embrace fully.

Despite record profits from traditional vehicles and strategic acquisitions of companies like Volvo and Daimler, Geely’s transition into the new energy space has been somewhat hesitantAlthough the company recognized the potential in electric vehicles as early as 2015, with objectives set for 90% of its models to switch to electric by 2020, execution has lagged behind the visionR&D investments soared from CNY 1.93 billion in 2018 to CNY 4.8 billion by 2020—a substantial increase of over 148%. Yet, compared to emerging competitors in the market during the same period, this investment was glaringly insufficient.

To illustrate, while Li Auto allocated CNY 1.1 billion to R&D in 2020, it still accounted for a notable 11.6% of its total revenue of CNY 9.457 billion, whereas Geely’s R&D expenses constituted a mere 5% of its total revenue

This stark contrast underscores a troubling trend: Geely is operating on massive revenue streams yet investing less in innovation and development in the EV domain—a contradiction that raises questions regarding sustainability in the competitive landscape.

Reflecting this underperformance, Geely struggled in the early new energy market, selling only 68,000 electric vehicles in 2020—a decline of nearly 40% from the previous year, representing a mere 5.2% of overall salesThe situation did not improve in 2021, when Geely only managed to deliver 61,000 new energy vehicles, a slight decrement from the previous year.

However, the narrative began to turn in 2022 when consumer confidence in new energy vehicles burgeoned, and Geely ramped up its efforts, reaching total new energy sales of 328,727 units—including both all-electric and hybrid models—an extraordinary growth of over 300% from the prior year

This momentum continued into 2023, with total sales climbing to 487,461 units, an increase of more than 48% year-on-year.

By 2024, Geely’s new energy vehicle sales had soared to an impressive 888,200 units, with the company finally turning a profit on its operationsThis marked a critical milestone as it joined Li Auto as one of the few brands achieving profitability in the new energy landscape.

Geely’s portfolio now boasts three major brands in the electric vehicle arena: the Galaxy series, Zeekr, and Lynk & CoFor 2024, the Galaxy series emerged as the leading sales contributor, positioning itself in the competitive lower and mid-tier market with price ranges of CNY 60,000 to CNY 170,000. This price segment is increasingly crowded, with rivals such as BYD capturing significant sharesThroughout 2024, the Galaxy series achieved sales of 494,440 units, translating to an impressive increase of 80% from the prior year.

The Zeekr brand targeted a mid-to-high price segment, delivering a total of 222,123 units—a year-on-year growth of 87%. Zeekr's pricing spans from CNY 140,000 to CNY 770,000, with the flagship model—Zeekr 009—positioning itself as a luxury MPV priced between CNY 400,000 and CNY 800,000.

Following closely is the partnership brand Lynk & Co—a joint venture with Volvo, offering both petrol vehicles and electric models priced within CNY 130,000 to CNY 350,000. In 2024, Lynk & Co contributed to the overall new energy sales with 167,848 units representing over 163% growth from the previous year.

Nevertheless, Geely’s recent restructuring of the ownership models between Zeekr and Lynk & Co has raised eyebrows

This strategic move intended to streamline operations, transitioning Lynk & Co into a subsidiary of ZeekrWhile this alignment aims to reduce internal competition and consolidate offerings, concerns remain regarding the overlapping segments of the two brands, specifically in the CNY 130,000 to CNY 250,000 price rangeThis overlap could complicate marketing strategies, as both brands could inadvertently compete for the same customer base.

Despite the favorable sales figures, it’s crucial to discern that challenges remainGeely's diverse product lineup—spanning an extensive range from CNY 60,000 to CNY 600,000—doesn't exempt it from intense competition within each market segmentMoreover, quality control still presents a hurdle in maintaining consumer trustRecent complaints regarding product reliability have placed Geely under scrutiny, with 2,337 total complaints logged against Geely vehicles, accompanied by 1,864 complaints pointed towards Zeekr and 1,862 affecting Lynk & Co models.

As the EV industry evolves into a maturation phase, the focus will undoubtedly shift from quantity-driven growth to long-term brand equity and consumer satisfaction

This transition emphasizes the necessity for high-quality products and exceptional after-sales service, areas where Geely must elevate its gameWhat once served as a competitive advantage—affordability—now poses risks as the brand navigates its identity amidst a saturated market.

For instance, a recent proposition for the Geely Xingyue L—a range-extended EV priced significantly higher than its gasoline counterpart—has sparked questions about its value proposition in the absence of substantial technological advancementsHow will consumers justify these inflated prices, and what implications will this have for Geely’s brand reputation?

Moving forward, achieving greater traction in the new energy market requires a renewed focus on overcoming these internal challengesAs Geely strives to carve out its niche in the competitive electric vehicle space, addressing concerns about product quality and brand perception will be paramount for lasting success.