Everyone is looking for a "second curve," but the main business of making cars still needs to be done solidly.
Zero-run sold 103,000 vehicles, XPeng sold 39,000 vehicles, NIO sold 36,000 vehicles, and Li Auto sold 38,000 vehicles. This is the sales data for the four "new forces" in the automotive industry in August. The top three companies' sales were basically flat compared to July, while Li Auto sold around 7,200 more vehicles in August due to a lower base in July.
As the rankings of emerging car manufacturers gradually stabilize, what excites the capital market is no longer the monthly sales volume, but what else car companies can do beyond selling cars.
Recently, these four automakers have released their semi-annual reports, reflecting their different ambitions and anxieties. XPeng and Leapmotor submitted their reports on the same day, and during the earnings call, analysts asked XPeng the most questions about robots, while Leapmotor's management spent a considerable amount of time discussing the pace of going overseas and cooperation with Stellantis.
Among the four, Li Auto has the largest cash reserves and is attempting to emphasize its AI attributes beyond car manufacturing, but analysts' questions ultimately circled back to sales volume. NIO, which just released its earnings on September 1, is relying on its multi-brand matrix to continue delving deeper into the car-making business.
The differentiation of new forces has shifted from sales volume to competing on their "second curve".
Different Earnings Conference Calls
This was an atypical earnings call for an automaker, to the point where if you didn't know it was Xpeng's home turf, you might have thought it was a robotics company breaking down its financials.
Right off the bat, analysts from Morgan Stanley and BofA Merrill Lynch fired off a string of questions, all centered on XPeng's Iron robot: What's the delivery target for 2027? Where does per-unit cost land for the mass-produced version? What's the gross margin? And who exactly will be buying Iron?
Analysts can hardly be blamed for straying off-topic. On the day of the earnings release, XPeng's robotics unit announced it had closed a $900 million funding round, valuing the business at over $6.3 billion post-investment. Investors include IDG, Gaorong Ventures, Tencent, and Alibaba. Earlier in June, He Xiaopeng had already taken the helm personally, assuming the role of CEO of the robotics business to coordinate collaboration across the vehicle, supply chain, and AI teams.
On the conference call, He Xiaopeng stated that the Iron is planned to start mass production by the end of 2026 and will be first deployed in XPeng stores as a guide. It is expected to start external delivery in the first half of 2027, and production capacity will be accelerated within the year, which can be expanded to several thousand units or more per month based on market demand.
Due to the high overlap in supply chains and the natural compatibility of autonomous driving with AI, car companies are considered more likely to expand into embodied intelligence. Currently, 85% of Iron's supply chain overlaps with that of XPeng Motors, with the most direct benefit being cost reduction. According to industry convention, the pricing of Chinese robot products is usually 2.5-3 times the BOM, and if AI models and software subscriptions are added, it may also open up other recurring revenue streams. However, for now, the usage scenarios for humanoid robots are limited. "Compared to cars, the production capacity for robots will be much smaller," said He Xiaopeng.
Although robots took center stage at the earnings conference, the foundation of the stage remains the automotive business. In the first half of the year, XPeng's revenue was 32.78 billion yuan, down 3.8% year-over-year; of which, due to the decline in sales volume, automotive sales revenue was 28.05 billion yuan, down 10.3% year-over-year, accounting for as high as 85.6% of total revenue.
By comparison, service and other income reached 4.73 billion yuan, up 67.1% year-over-year. This revenue stream comes partly from technical R&D services XPeng provides to third parties such as Volkswagen, and partly from sales of automotive components and parts.
While XPeng's automotive gross margin stood at 12.1%, its services and other segments posted a robust 71.4% margin, lifting overall gross margin to 20.6% in the first half. The figures aren't unfavorable, yet XPeng's net loss reached 3.12 billion yuan in H1, 2.7 times the year-earlier level. The widening losses stem mainly from expenses and continued investment in new ventures such as robotics and flying cars.
Using cash flow from car sales to fund robotics development sounds like a high-stakes gamble, but XPeng's logic holds together. The VLA vision-action models, perception algorithms, path planning, motor control, and supply chain management capabilities accumulated through autonomous driving can all transfer to humanoid robots. Along similar lines, Tesla, Xiaomi, BYD, and others are all positioning themselves in robotics—it has become an open secret across the industry chain.
The difference lies in the pace and determination. Xpeng is the only "new force" in the automotive industry that has placed robots at a strategic level and is willing to spend a significant amount of time discussing them during earnings calls, proactively shifting its valuation logic from automotive to physical AI.
But the flip side is risk: robots remain far from large-scale commercialization and burn cash quickly. If the core automotive business stumbles due to price wars or product-cycle missteps, can the continued losses from robotics still support a "second growth curve"?
Second Curve: Going Global
If Xiaopeng's second curve is "futuristic", then IM's second curve is the "present tense" of going overseas. IM doesn't tell a story as sexy as robots, but what appears frequently in phone calls is going overseas and collaboration.
In overseas markets, Leapmotor exported 96,300 vehicles in the first half of this year, up 372.6% year over year and accounting for 27% of total sales, surpassing its full-year 2025 export volume. Senior Vice President Li Tengfei said the company's original export target of 100,000 to 150,000 vehicles for this year will be raised to around 200,000. Leapmotor's overseas sales target for 2027 is set at 350,000 to 400,000 vehicles, nearly double the 2026 goal.
As the domestic car market faces increasing internal competition, going overseas has become the second growth curve for NIO to break through its growth bottleneck. In the first half of the year, NIO delivered 356,500 vehicles, a year-on-year increase of 60.8%, ranking first among the "new forces"; in July and August, sales continued to expand, with monthly sales exceeding 100,000 vehicles for two consecutive months. Although this path is not as sci-fi as robots or AI, it has more stable cash flow and higher certainty.
Similar to Zero Run, companies like BYD, Geely, Chery, and Great Wall also view going overseas as an important driver of growth. For example, in the first half of the year, Chery's total sales were 1.3575 million vehicles, with 943,800 vehicles exported, accounting for nearly 70% of the total; Geely's exports in the first half of the year increased by 158% year-over-year to 474,200 vehicles, and in July, exports exceeded 106,700 vehicles, with a year-over-year growth rate of 202.4%.
In comparison to other automakers, Zerun has a unique approach to going overseas, namely its synergy with Stellantis. By leveraging Stellantis' overseas channels and brand advantages, Zerun is able to enter the overseas market with lower investment.
In particular, on the manufacturing side, Chinese automakers have been accelerating their market expansion by building factories overseas in recent years. XPeng has also accelerated its localized production layout through Stellantis' factories in Malaysia, Spain, Brazil, and other locations, thereby reducing capital expenditures and time costs. While localized production can reduce tariff costs, the procurement prices of some components are higher than those in China, and the overall profit is not as significant as the market had imagined.
Especially in the early stages of cooperation with Stellantis, the agreed-upon gross margin level for overseas models was relatively low, reflecting that the short-term priority for Zerun's overseas expansion was to seize market share rather than pursue profitability. Zerun International achieved profitability in 2025, and although it incurred a small loss in the first half of 2026, management attributed this mainly to exchange gains and losses, predicting that it will be offset in the second half and the company will still be profitable for the full year.
The "emphasis on scale, light on profit" model will continue for NIO. On the conference call, NIO's management stated that the current stage is a critical node for Chinese car companies to seize overseas markets, and while profitability will be valued, sales growth will be given top priority.
Among the "new forces," Zero Run has achieved profitability for three consecutive half-years, confirming that relying on ultimate cost-effectiveness and overseas market dividends is a more practical choice for automakers.
Returning to the Origins of Automobile Manufacturing
Among the four, Li Auto may be the one most eager to prove it is "more than just a car company." Li Xiang has emphasized on multiple occasions that Li Auto is not merely an automaker but an artificial intelligence company—from self-developed chips and batteries to end-to-end autonomous driving, every move is aimed at positioning the company as a technology firm.
But on the earnings call—where real money is on the line—the order of analysts' questions revealed the market's true stance. Unlike the buzz around XPeng's Iron robot, analysts first focused on Li Auto's sales and costs, with AI coming last.
The first half of the conference call was almost entirely about cars. In the second quarter, Li Auto delivered 98,300 vehicles, down 11.5% year-over-year. Li Auto President Ma Donghui attributed the reason to the model changeover. As Li Auto's extended-range L series enters the end of its product cycle, this year's transition from the L9 to the L6 to a new generation platform is underway. During the period of clearing old inventory at a discount and ramping up new products, Li Auto's sales and gross margin are under pressure.
Extended-range vehicles were once the comfort zone for Li Xiang, but as the extended-range market as a whole shrinks, Li Xiang is also accelerating its transition to pure electric vehicles. Currently, the order structure of Li Xiang's extended-range and pure electric vehicles is approaching equilibrium, with July sales of approximately 30,300 vehicles, of which the pure electric model i6 contributed around 15,300 vehicles, accounting for nearly half of the total.
However, the lower pricing of the i6 dragged down profitability. In the first half of the year, Li Auto's vehicle gross margin fell from 19.6% in the same period last year to 7.8%, with the earnings report acknowledging the impact of a "different product mix". In other words, as the proportion of high-margin extended-range vehicles decreased and sales of the more affordable i6 increased, profits were inevitably sacrificed.
Furthermore, with the price increases of chips, lithium carbonate and other raw materials, Ideal Auto reported a loss of 3.98 billion yuan in the first half of the year, compared to a profit of 1.744 billion yuan in the same period last year.
If saying that Ideal is "forced" to talk about making cars, then NIO has taken the initiative to build a multi-brand matrix consisting of NIO, ALPS, and Fiennes, continuously deepening its efforts in the first curve of car manufacturing. In the second quarter, the sales volumes of NIO, ALPS, and Fiennes were 61,000 units, 29,000 units, and 18,000 units, respectively, with the total sales volume of the three brands increasing by 49.4% year-over-year. While the main brand maintains stable output, ALPS and Fiennes have entered different price ranges, and the brand matrix has initially started to gain traction.
However, the multi-brand layout has also increased marketing and R&D investments. In the second quarter, NIO's net loss (GAAP basis) was 528 million yuan, although the loss narrowed by nearly 90% year-over-year, it expanded from 332 million yuan in the first quarter (if based on the attributable to ordinary shareholders, the net loss in the second quarter was 722 million yuan). Although NIO's adjusted operating profit in the second quarter turned positive to 210 million yuan and achieved adjusted profitability for three consecutive quarters, overall profitability under GAAP still requires time.
In the second half of the earnings calls of Li Auto and NIO, AI was mentioned. Unlike Xpeng, which emphasized its IRON robot from the start, Li Auto's introduction of AI was more closely related to its main automotive business, focusing on its self-developed battery, the Mahle M100 chip, and the application of the VLA model in new car models. NIO, on the other hand, was only asked one question about its external investment in AI, with AI playing a marginal role in the call.
The two founders also have a more pragmatic attitude towards AI. In the view of Li Xiang, founder of Li Auto, batteries and chips are the most core barriers, and embodied intelligence is just a natural extension. NIO founder William Li stated more directly that the company supports the head of its autonomous driving department, Ren Shaoqing, in setting up an external AI company, with NIO participating as a strategic shareholder, which can help attract top talent from external strategic shareholders, but for now, NIO remains focused on its core business.
For both companies, the market remains most concerned about whether sales can be stabilized, gross margin levels, and the market performance of new products, among other fundamentals. AI is more like a slow-changing variable, which has been quietly unfolding but has not yet reached the point where it can independently support a valuation story.
From the current stage results, whether it's Xpeng's bet on humanoid robots, Leapmotor's all-in overseas expansion, Li Auto's shift towards AI, or NIO's multi-brand car manufacturing, none of these second curves can be said to have been fully established. However, one thing is certain: relying solely on the domestic market to sell cars is no longer a viable growth strategy, and new forces must find new incremental spaces. Whoever can first convert their second curve into a stable cash flow will be more likely to take the initiative in the next round of competition.