2 Chinese EV Makers Setting Record Sales and Improving Margins

Core Insights - Electric vehicle (EV) sales in both the United States and China reached record levels in 2024, with American automakers General Motors and Ford achieving their highest EV sales ever [1] - In China, six automakers set monthly sales records in December, including ZEEKR and Xpeng, indicating strong market performance [1] ZEEKR Intelligent Technology - ZEEKR sold over 27,100 electric vehicles in December, marking a 102% increase compared to December 2023, and achieved a total of over 222,000 deliveries in 2024, an 87% increase from 2023 [2][3] - The company improved its gross margin by nearly 500 basis points since Q3 2023, with operating and normalized net income margins also increasing, although both remain negative [3] - ZEEKR aims to boost deliveries by 44% in 2025, targeting 320,000 vehicles [3] Xpeng - Xpeng delivered nearly 37,000 vehicles in December, an 82% increase year-over-year, and achieved over 91,000 deliveries in Q4, exceeding guidance [5][6] - Full-year sales reached 190,000, a 34% increase from 2023, with analysts forecasting deliveries of 400,000 vehicles in 2025, representing a 110% increase [5][6] - Xpeng's gross margin improved from just above 0% to nearly 12%, with operating margin improving from -50% to -17% and net income margin from -31% to -9% over the last 12 months [6] Market Outlook - China's National Development and Reform Commission extended a key subsidy for EV purchases, providing approximately $2,700 for consumers replacing old vehicles, which is expected to add 3 million units of demand in 2025 [7][8] - Analysts predict a 20% growth in new electric vehicle sales in 2025, a decline from the 40% growth seen in 2024, but still expect EVs to account for over half of all cars sold in China [8] - Challenges include flat exports of EVs from China, which may impact growth, although international sales currently represent a small portion of total sales for Xpeng and ZEEKR [9]