Geely has once again become the first Chinese automaker to release its first-half results.
Clearly, Geely has delivered a very steady report card.
Total sales of 1.423 million units, total revenue of 173.6 billion RMB, and core net profit attributable to shareholders of 9.68 billion RMB—all three hitting record highs. In a half-year where domestic industry sales fell 21.1% year-on-year and the average industry profit margin under the CAAM (China Association of Automobile Manufacturers) criteria was only 1.6%, this financial report holds substantial weight.
However, at the press conference, Gui Shengyue, Executive Director of Geely, characterized it as "not a stunning financial report." He added two more memorable remarks: we lack blockbuster products; we lack mid-tier strength.
This article will deeply analyze Geely's financial performance, product strategy structure, global layout, and management changes in the first half of 2026, to see what supports this "steady" financial report, what is concealed, and what trends it reveals about Geely. Hope to bring you some information and insights.
First-Half Financial Performance
Core Financial Metrics and Year-on-Year Growth Tiers
Total Sales: Total sales in the first half reached 1.423 million units, a 1% year-on-year increase. Keep in mind that in the same period last year, it was 1.409 million units with a 47.4% year-on-year growth. In just one year, the growth rate dropped from 47% to 1%, making it urgent for Geely to open up a second growth curve.
Revenue and Profit: Total revenue reached 173.6 billion RMB, a 15% year-on-year increase. Core net profit attributable to shareholders was 9.68 billion RMB, up 46% year-on-year, with a core net profit margin of 5.6%.
Profit per Vehicle: Core net profit attributable to shareholders per vehicle was 6,806 RMB, a 45% year-on-year increase. In the same period last year, it was 4,724 RMB.
Gross Profit and Gross Margin: Total gross profit was 31.2 billion RMB, up 26% year-on-year. The gross margin was 17.9%, an increase of 1.5 percentage points year-on-year (16.4% in the same period last year). Note that last year this figure was down 0.3 percentage points year-on-year, but it has turned positive this year.
Expenses and R&D: The administrative expense ratio dropped from 1.9% to 1.7%, a decrease of over 12%; the R&D expense ratio dropped from 5.5% to 5.2%, but the absolute amount of R&D investment bucked the trend and grew by 8% to 9.06 billion RMB. The expense ratio dropped while R&D did not decrease—this is the hardest evidence of the "One Geely" integration.
Management summarized this financial report in one sentence: revenue growth outpaced sales growth, gross profit growth outpaced revenue growth, and core net profit growth outpaced gross profit growth. Sales barely moved, while profits grew by nearly half.
So the question arises: what exactly is amplifying the profits?
The Truth Behind the Gross Margin
Two Drivers of Gross Margin Improvement in Q2
This time, CFO Dai Yong provided a previously undisclosed figure: the domestic gross margin is about 15 percentage points, while exports are 22 to 25 percentage points, a difference of about 10 percentage points.
The Q2 gross margin was 18.4%, and Q1 was 17.5%, a quarter-on-quarter increase of 0.9 percentage points. Dai Yong gave two drivers: Zeekr grew from 77,000 units in Q1 to over 100,000 units in Q2 (Zeekr's overall gross margin exceeds 20%), and exports grew from 203,000 units in Q1 to 271,000 units in Q2.
Note that both drivers are about "increasing the proportion of high-margin segments," not "making the same business segment more profitable." This distinction is crucial.
Calculating backwards based on the segment gross margins he provided leads to a conclusion he didn't state.
In the first half of 2025, the export proportion was 13.0% with a gross margin of 16.4%; in the first half of 2026, the export proportion was 33.3% with a gross margin of 17.9%. Calculating based on exports being 10 percentage points higher than domestic, last year's domestic gross margin was about 15.1%. If the domestic gross margin remained unchanged, simply relying on the additional 20.3 percentage points from the export proportion should have resulted in a comprehensive gross margin of 18.4% this year. But it was actually only 17.9%, a difference of 0.53 percentage points. Reverse-calculating this reveals that the domestic gross margin dropped from about 15.1% to about 14.6%.
Moreover, this conclusion is actually underestimated. Zeekr grew 97% domestically during the same period, which would inherently pull up the domestic average gross margin. The fact that the domestic gross margin still declined despite Zeekr's pull indicates that the domestic gross margins for Galaxy, Lynk & Co, and China Star dropped by more than 0.5 percentage points.
In short: the record-high gross margin of 17.9% is propped up by the export structure; the gross margin of the domestic business is actually falling.
That +1% Comes Entirely from Exports
Breakdown of Domestic and Export Sales
The sales side tells the same story.
Exports reached 474,000 units, a 158% year-on-year increase. Extrapolating backwards from this growth rate, the same period last year was about 184,000 units. Total sales only increased by 14,000 units, while exports increased by 290,000 units, meaning domestic sales decreased by about 277,000 units, or approximately -22.6% year-on-year.
During the same period, the industry's domestic sales under CAAM criteria were -21.1%. In other words, Geely's domestic performance slightly underperformed the broader market.
Comparing this with BYD: first-half sales of 1.8085 million units, -15.72% year-on-year, domestic -39.2%. Geely's domestic -22.6% is clearly better than BYD's, but both are suffering from the same ailment.
At this time last year, the title I wrote for Geely's semi-annual report was "Geely's First Half of 2025 - The Pressure is on BYD." A year has passed, and the pressure on BYD has indeed materialized, but Geely itself hasn't won in such an involution-heavy domestic market; what it won is overseas expansion.
Geely's Product Structure: A Dumbbell
Revenue Structure of Zeekr and the Other Three Brands
When answering a reporter's question, Gui Shengyue said a paragraph that I consider the most informative three minutes of the entire press conference:
"We still lack blockbuster products; this is the core issue."
"I have always said, Jiayue and I have been discussing, I said we lack mid-tier strength, mid-tier products. At the top we have Zeekr, at the bottom we have Galaxy Star Wish, but our mid-tier strength... we have already recognized this problem."
Distributing revenue across sales volume makes it very clear how extreme this dumbbell is.
Zeekr: 178,000 units, +97% year-on-year; revenue of 55 billion RMB, +103% year-on-year; revenue per vehicle of 309,000 RMB. It accounts for 12.5% of total sales but contributes 31.7% of revenue.
The other three brands: Galaxy 520,000 units, China Star 581,000 units, Lynk & Co 144,000 units, totaling about 1.245 million units, with revenue of about 118.6 billion RMB and revenue per vehicle of about 95,000 RMB.
The revenue per vehicle on both sides differs by 3.3 times.
Why can't the mid-tier be empty? According to CAAM's first-half data, the chart summarized by Vehicle Analysis intuitively shows that the 150,000 to 250,000 RMB price band has the largest capacity in China's passenger car market, and it is the only interval where "volume, price, and profit" can all be achieved simultaneously.
China Passenger Car Sales by Price Range from January to June 2026 (Combined Calculation for ICE + NEV)
If Geely leaves the mid-tier empty, improving the gross margin leaves only two paths: continue to increase the proportion of Zeekr, or continue to increase the proportion of exports. Both have ceilings, and neither solves the profitability issue for the other 87.5% of sales.
Of course, Zeekr's 350,000 RMB price band is currently the zone where the 9-series products of the entire Chinese auto brands are fiercely attacking, as shared in our previous article "400,000 RMB Death Line: 6 Independent Flagship SUVs, the Winner is Written Before Launch." This domestic segment is being squeezed by AITO (240,000+ in the first half) and NIO (+62.9%).
Therefore, Geely using Zeekr's 12.5% sales to carry 31.7% of revenue means that once this leverage loosens, both revenue and gross margin will face simultaneous pressure.
Geely's answer for the second half is the Galaxy TT (coupe), Galaxy Warship 700 (hardcore SUV), and Lynk & Co 20. The early signals for the Galaxy TT are good; it made its pre-sale debut on July 21, with 999 first-edition limited units selling out in 27 minutes; after official pre-sale on August 13, small deposits exceeded 20,000 units in three days.
But Gui Shengyue himself also said that many products "were planned and implemented many years ago, and are now being sorted out, which requires a process and time." The mid-tier will most likely not be truly filled in 2026.
Geely's Product Strategy: Full Transition of ICE to HEV, This is Not a Domestic Strategy
Domestic Terminal Decline and the Global Stock Market of ICE Vehicles
Gan Jiayue announced a strategic decision at the press conference:
"Geely will no longer develop traditional internal combustion engine vehicles in the future; all fuel products will fully transition to HEVs."
Many reports interpreted this as a "defense battle for fuel vehicles." But placed in the context of the data he provided himself, this interpretation is wrong.
The domestic figures he gave are: fuel vehicles -31.9%, PHEVs -28.3%, BEVs only -9% and gradually turning positive after April, with the domestic NEV penetration rate reaching 67.2% in June. Meanwhile, HEVs neither get green license plates nor subsidies domestically.
What he is truly targeting is another set of figures: the global passenger car market is about 80 million units a year, China 25 million, the US 15 million. Removing these two, the remaining overseas markets still have about 40 million units, with an NEV penetration rate of just over 10%.
And for those who followed our previous article on Toyota, "Toyota FY2027 Q1 Deep Dive: Cracks Appear for the Hybrid King," nearly 50% of Toyota's global products are HEVs. Therefore, Geely's HEV strategy is looking even more at the global market.
Gan Jiayue also mentioned the timeline: "Next year, we will also comprehensively layout all HEV models overseas." Understanding this point makes the goal of "one million China Star" viable.
Geely's i-HEV technical specifications are impressive: 60C high-rate battery, 230 kW electric drive, 48.41% engine thermal efficiency, fuel consumption 12% lower than the most fuel-efficient Japanese hybrids, and 0-100 km/h acceleration over 1 second faster. These are directly benchmarking the stock market of Toyota and Honda in these regions.
The risk is the time gap: before going overseas in 2027, China Star must independently withstand the -31.9% decline in domestic fuel vehicles.
Recharging: A Technical Line Not Yet Priced by the Market
Evolution of Hao Han Energy Recharging Technology
When online investors asked about recharging, Gan Jiayue answered for seven minutes, full of solid content.
Geely established Hao Han Energy Recharging Company in 2021, being among the first domestic companies to launch super-charging piles: 360 kW in 2021, reducing charging from hours to 30 minutes; in 2023, launched the world's first fully liquid-cooled super-charging pile, reducing it to 11.5 minutes; in April 2025, launched the 1,500 kW, the world's first mass-produced megawatt-level ultra-charger, with an actual power of 1,320 kW, taking only 4 minutes and 22 seconds from 10% to 70%. The fifth-generation recharging ecosystem technology will be released globally before the end of September.
But the true differentiation is not in "speed," but in how Gan Jiayue defined the problem as a contradiction: for every 10°C increase above 45 to 50°C, battery degradation doubles, "a battery that could originally last 10 years might only last 5 years at most." He also used a very straightforward analogy: fast charging is like smoking, harmful to health, but it won't immediately reflect problems in a short time.
Therefore, the proposition for the fifth-generation technology becomes "fast without damaging the battery": intelligent temperature control within the national standard 65°C, millisecond-level AI temperature control between vehicle, pile, and cloud, and simultaneous charging, detection, and maintenance.
Why is this line important? It simultaneously serves Zeekr's residual value narrative and the after-sales market for exports, and after-sales is precisely one of the lessons Chinese automakers need to make up for when going overseas. He said, "Whether after-sales service can be done well is one of the important indicators of whether Chinese car companies can succeed in going global." Currently, this line is basically not priced by the market.
Geely's Globalization Strategy: Fourth in Exports, First in Growth Rate
Top Six Enterprises in Complete Vehicle Export Volume from January to June 2026
For overseas expansion, let's first lay out the positions of each company. According to CAAM criteria, complete vehicle export volume from January to June 2026: Chery 939,000 units, BYD 792,000 units, SAIC 677,000 units, Geely 585,000 units, Changan 455,000 units, Great Wall 291,000 units.
Geely is fourth, about 62% of Chery's volume.
A reminder on the statistical caliber here: CAAM's 585,000 units is Geely Group's complete vehicle export caliber; while the listed company Geely Automobile (0175.HK) caliber is 474,000 units, +158% year-on-year. The two numbers cannot be mixed.
The growth rate is indeed first among mainstream automakers, but +158% started from a low base of 184,000 units, whereas Chery achieved +71.4% on a volume level of 939,000 units. Looking solely at export units, Geely is still a chaser.
But Geely is Playing Another Chess Game
Five Regional Targets of Geely's Overseas "One, Two, Three, Four, Five, Six" Strategy
During the Q&A session, Geely's Gan Jiayue comprehensively shared Geely's international "One, Two, Three, Four, Five, Six" mid-term strategy for overseas exports.
"One" is an overseas Geely system: the middle and back offices are integrated into one system, while the front office is layered by three brands—Zeekr focusing on tech and high luxury, Lynk & Co focusing on sports and trendiness, and Geely focusing on mainstream family use.
Geely Overseas Brand Positioning · The "One" in the "One, Two, Three, Four, Five, Six" Strategy
"Two, Three, Four, Five, Six" are five regional markets: Europe 600,000 level, ASEAN 500,000 level, Latin America and Africa 400,000 level, Eastern Europe 300,000 level, Middle East and Asia 200,000 level, totaling 2 million units.
This year's export target has been raised from 640,000 at the beginning of the year to 920,000, and is challenging 1 million. The long-term goal, as An Conghui said, is for two-thirds of sales to come from overseas markets, which is even more aggressive than the BYD global expansion plan we shared before ("BYD's Global Expansion Plan - 800,000 Overseas Sales in 2025, 50% Sales Overseas in 2030").
From 920,000 to 2 million is 2.2 times. This is no longer just an export plan; it's a plan to move the company's center of gravity entirely overseas.
The True Moat is Capacity, Not Unit Numbers
Geely Overseas Localized Capacity Matrix and Production Launch Nodes
This time, An Conghui fully detailed the overseas capacity layout for the first time, which I consider the most valuable overseas disclosure of the entire press conference:
Ford's Spain plant: about 500,000 units, based on Geely's GEA architecture and Galaxy products, fully producing multiple Geely brand models in 2028.
Proton (Malaysia): about 500,000 units, currently undergoing technical transformation to be built into a Southeast Asian production and manufacturing base.
Renault Brazil project: about 300,000 units, South American layout.
Volvo Europe plant: a luxury car production base within the system, producing multi-brand high-end luxury products in 2028.
Renault Korea plant: a cooperative project.
Currently, 12 overseas factories are in operation, with overseas capacity exceeding 650,000 units, which will exceed 840,000 units by the end of the year. Li Shufu made it absolutely clear in a pre-recorded video: "We will not build new capacity."
The EU has already imposed comprehensive tariffs of up to 45.3% on Chinese BEVs, and An Conghui also mentioned that "the EU is about to introduce relevant industrial regulations." In the era of tariff barriers, localized capacity is the only solution. BYD is taking the self-built route: heavy, slow, and high capital expenditure; Geely is taking the shared capacity route: light, fast, and risk-controllable.
The true threshold for this model is not money, but trust. Gui Shengyue summarized Geely's three major advantages in going overseas, and the third is "the historical trust from global peers, unique to Geely Automobile." Volvo, Proton, Renault, and Ford are willing to hand over their factories and supply chains to Geely, an asset accumulated over more than 20 years of M&A and cooperation history. This is something Chery and BYD cannot replicate in the short term.
But the problem lies in the timeline: Ford Spain and Volvo Europe won't be operational until 2028. The target has been raised to 920,000 and aims for 2 million, but capacity is two years away—2026 to 2027 is a window period, during which they can only rely on complete vehicle exports, which is precisely the method most heavily targeted by tariffs.
Zeekr Going Overseas: From Cost-Performance to Brand
Zeekr exported 42,000 units in the first half, with a full-year target of breaking 80,000 units, and an export growth rate of over 200%. The 9X will be launched successively in the Middle East, Europe, Southeast Asia, and Australia starting in Q3; the 8X will enter Europe, the Middle East, and Latin America in Q4; the 009 and 009 Brilliance will make their debut in Q4.
There are two details from the meeting worth noting. First, while the 9X and 8X are still in overseas certification, some customers have already chartered planes to ship the cars back, with "markups basically over hundreds of thousands of RMB"; second, Zeekr already accounts for one-third of the domestic market above 500,000 RMB, and An Conghui said they also aim to "take one-third of the global luxury car market."
Gui Shengyue explained the significance of this most clearly: Chinese NEVs have indeed gained global recognition, "but this recognition is currently still based on the recognition of a mass-market NEV product," and what Zeekr needs to prove is that Chinese people can also build luxury cars.
He also admitted: "The real actions in this regard have not yet begun and are currently being deployed." This is the biggest empty promise of the entire press conference, and also the one with the highest odds.
Behind Geely's Management Changes
Geely Automobile Management Changes on August 17, 2026
Half an hour before the press conference started, the company issued an announcement.
Li Shufu stepped down as Chairman of the Board of Geely Automobile (0175.HK), transitioning to Lifetime Honorary Chairman, and continues to serve as Chairman of Geely Holding; An Conghui takes over as Chairman of the Board, while concurrently serving as CEO of Geely Holding; Gan Jiayue takes over as CEO; Gui Shengyue steps down as CEO, transitioning to Vice Chairman of the Board and Executive Director, stationed in Hong Kong to oversee capital markets; Li Donghui steps down as Vice Chairman, remaining as Executive Director.
Gui Shengyue characterized this change as:
"This is not a simple personnel change; it is a strategic organizational evolution declaration for Geely Automobile... declaring to everyone Chairman Li Shufu's values regarding corporate succession, a declaration of de-familialization."
Among China's top private automakers, this is the first to complete a chairman-level handover. BYD, Great Wall, and Chery still maintain strong founder control.
But this narrative needs to be viewed separately: Li Shufu still serves as Chairman of Geely Holding and Lifetime Honorary Chairman of 0175, so his substantive influence has not changed. "De-familialization" is currently in terms of governance form; the real test will come when the first strategic divergence occurs.
A more practical meaning lies in the sentence Gui Shengyue said next. He said that as the current CEO of Geely Holding, 0175 will be the only listed company within the Geely system where he serves as Chairman; the goal is to "concentrate all the group's high-quality resources to make the listed company bigger, more solid, and stronger."
An Conghui's speech immediately provided an asset inventory: the Golden Battery has formed a capacity of 70 to 80 GWh this year, 200 GWh next year, and 300 GWh in 2028, including not only power batteries but also energy storage batteries, and not only lithium but also sodium; a battery system enterprise with a capacity of several million units; and Hangzhou Jiyi: core NEV electronic and electrical components, with vehicle domain control, drive control, and battery management systems all in place. His exact words were, "As long as it benefits 'One Geely' and the development of 0175, Geely Holding will fully support it."
In other words, the essence of this management change is turning the "injection of group assets into the listed company" from a strategic intention into a governance arrangement.
Li Shufu's exit from the 0175 Chairman position is equivalent to detaching the listed company from the narrative of family control. When negotiating shared capacity with transnational partners like Ford and Renault, a governance structure "driven by systems and teams" is more easily accepted than one "driven by the founder." Personnel and overseas expansion are two sides of the same coin.
Two Pieces of Missed Information
Accounts Payable Turnover Days. When a reporter on-site asked if accounts payable had doubled, Dai Yong first clarified the data: trade payables were 81 billion RMB at the end of 2025, and 84 billion RMB at the end of June 2026, an increase of only 3 billion. But the real information is the turnover days: 115 days in H1 2025 → 103 days in H1 2026 → compressed to 96 days in Q2 2026 alone. After the anti-involution policy, all payment terms over 60 days are compressed to within 60 days, and small and medium suppliers to within 30 days, which may later be changed to cash on delivery.
Proactively shortening payment terms is equivalent to using one's own cash reserves to absorb the supply chain's funding pressure. In an environment where the industry profit margin is only 1.6% and most automakers rely on extending payment terms to survive, there are no more than three companies capable of making this move. This was treated by the media as a clarifying response, but it is actually the hardest indicator of cash strength.
Integration dividends are one-time. The expense ratio dropping while R&D does not decrease is a scale effect, not cost-cutting, which explains why the core net profit growth (+46%) outpaced gross profit growth (+26%). But a reminder: cutting 20% of products and merging three middle platforms cannot be done a second time. Therefore, Geely needs to open up a second growth curve.
Concluding Remarks
Geely's first half of 2026 was a successful defense: using overseas expansion to offset domestic bleeding, and using integration to offset the price war. Both hedges were done beautifully, but both have clear exhaustion points; the export proportion cannot keep doubling, and the product line cannot be cut by another 20%.
For Geely's subsequent dynamics, attention needs to be paid to the first-month large deposits and third-month retention for the new 150,000 to 250,000 RMB mid-tier cars; whether Zeekr's quarterly ASP and gross margin will be eroded by the domestic price war; overseas capacity utilization rate (which explains better than export unit numbers whether "shared capacity" has truly worked); and the volume speed of the first batch of HEV overseas markets in 2027.
At this time last year, the title I wrote for Geely's semi-annual report was "Geely's First Half of 2025 - The Pressure is on BYD." A year has passed, BYD's domestic is -39.2%, total volume -15.7%, and the pressure has indeed materialized. But Geely's domestic also fell 22.6%, slightly underperforming the broader market: in this round, neither of the two giants won domestically; the winner is whoever runs through overseas expansion first.
Gui Shengyue said, "In the near future, a stunning financial report will appear." Whether that report appears depends not on whether exports can double again, but on whether Geely can build a car that resonates with consumers in the 150,000 to 250,000 RMB segment.
All I can say is that the upcoming auto market will be more brutal than last year, and this brutality is spreading to overseas exports.
References and Images
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