In the Chinese automotive industry, two names stand out: Li Shufu of Geely and Wang Chuanfu of BYD. Both entrepreneurs started their journey in the 1990s and have become giants in the domestic automotive sector, engaging in fierce competition over the years.
However, in recent years, BYD’s focus on new energy vehicles has propelled its growth ahead of Geely. In 2022, BYD surpassed Geely as the top-selling automaker. By 2023, the gap widened further, with BYD’s cumulative sales nearly doubling that of Geely.
Yet, by January 2024, Geely managed to reclaim the top spot in sales. How did Geely turn the tables, and what dynamics will the new energy market witness in 2024?
Back in 2021, Geely, with its market value of 300 billion Hong Kong dollars and the acquisition of Volvo, was hailed as the leader in autonomous car manufacturing. However, after 2021, the emergence of Tesla, BYD, and Weimar in the new energy vehicle market left Geely lagging behind.
In 2022, BYD’s cumulative sales of new energy vehicles exceeded 1.86 million units, capturing nearly one-third of China’s new energy vehicle market. In contrast, Geely’s new energy vehicle sales in the same year were only 328,700 units, significantly trailing behind BYD.
This gap can be attributed to BYD’s firm and extensive strategy in the new energy vehicle sector, launching a wide range of models from entry-level to luxury segments, while Geely mainly focused on traditional fuel and hybrid vehicles, despite early initiatives in new energy vehicle development.
Recognizing BYD’s potential, Geely’s Chairman Li Shufu launched a new action plan, emphasizing energy efficiency and new energy vehicles. This led to the introduction of models like Jike and Geometry.
However, Geely faced setbacks when several key researchers left for Xiaomi after interactions with Xiaomi’s CEO, Lei Jun. This incident escalated tensions between the two companies.
Nevertheless, Geely intensified its efforts, increasing its R&D investment to 15 billion yuan annually, aiming to become the top player in the new energy vehicle market by 2025.
In 2023, Geely’s strategic adjustments began showing results with the introduction of cost-effective new energy vehicles under brands like Jike, Geometry, and Galaxy. Despite still trailing BYD in overall sales, Geely’s growth rate was significant.
By January 2024, Geely’s overall sales surged, surpassing BYD’s. This achievement was largely due to a nearly 600% increase in Geely’s new energy vehicle sales.
Geely’s recent launch of the updated Jike 001 model at a competitive price further strengthened its position in the market, challenging competitors like BYD and Xiaomi.
Looking ahead, the new energy vehicle market in 2024 is expected to witness further price reductions as production capacities increase, battery costs decrease, and competition intensifies. This market evolution signifies a crucial turning point, with only a few key players expected to survive the industry shake-up.
Ultimately, Geely’s strategic adjustments and relentless pursuit of innovation have positioned it as a formidable contender in China’s evolving automotive landscape.