In the rapidly evolving landscape of the Chinese electric vehicle (EV) industry, the trio of Ideal, NIO, and Xpeng, collectively dubbed the "Weilai Xiaoli" (literally "Weilai" means "future" and "Xiaoli" can be translated to "small power"), has recently reported significant milestones in their performanceSince their establishment around the same timeline, these companies have begun to reap the benefits of innovation in the new energy car sectorThe third quarter data for 2024 has shown impressive delivery figures: Ideal delivered 152,831 vehicles, NIO 61,855, and Xpeng 46,533, marking year-on-year increases of 45.4%, 11.6%, and 16.3%, respectively.

Examining these financial achievements, Ideal stands out as the only company to have been profitable for eight consecutive quarters, achieving a net profit of 2.814 billion yuan during Q3. Meanwhile, NIO and Xpeng have both shown growth in gross margins, which have increased by 2.1 and 18.0 percentage points from the same period last year, resulting in gross margins of 13.1% and 15.3%. Despite not yet achieving overall profitability, NIO has expressed its aspirations, aiming for profitability by 2026, while Xpeng anticipates accelerating growth and reaching profitability by the fourth quarter of 2025.

The long-established trend within China's new energy sector is that of fierce competition, now leading to a more crowded marketplace

For example, tech giant Xiaomi has entered the fray as a “traffic king,” while the Harmony OS is collaborating with four automobile manufacturers to penetrate the premium segmentThese shifts reflect the intensifying competition and make it clear that the three companies—Ideal, NIO, and Xpeng—are now navigating a crucial turning point in their strategies to dominate the market.

Xpeng is increasing its focus on smart technologies while also exploring the less competitive range-extended electric vehicles as a more profitable avenueMeanwhile, Ideal sees a significant opportunity in the family-oriented market segment, planning to leverage smart technology alongside pure electric offerings to carve out its own nicheNIO, adopting a multi-brand strategy, is preparing to unveil a new brand, Firefly, as it also seeks to broaden its market reach through global expansion efforts

Yet, it remains uncertain whether these emerging strategies will effectively alter the existing competitive dynamics.

As the performance reports roll in, the atmosphere is charged with anticipationThis year has witnessed intense price wars, a flurry of new model launches, and aggressive testing at Nürburgring, revealing a market where some enterprises teeter on the brink of failure while others see gains in market shareWith the "Weilai Xiaoli" triad emerging remarkably in the new energy sector, their Q3 figures indeed show notable accomplishments, with Xpeng branding its current financial report as the strongest to date.

Ideal has distinguished itself not merely through profitable streaks, but with significant delivery numbers: 152,831 cars in the third quarter alone—a figure that makes its performance unparalleled among the "triplets." Revenue figures soaring to 42.87 billion yuan, a year-on-year uptick of 23.6%, have been somewhat subdued in net profits, which saw only a marginal increase of 0.3% from before, settling at 2.814 billion yuan.

Among the delivered models, the more affordable Ideal L6 has become a major player, achieving over 139,000 cars in the first six months since its launch

However, fulfilling demand is presenting challenges, necessitating a factory expansion projected for the Spring Festival in 2025. Consequently, consumer expectations are being recalibrated regarding vehicle pricing, with projections indicating a decrease in average sales prices, possibly dipping further through fourth quarter deliveries.

Moreover, mounting industry buzz around the Wange M8—a significant competitor—could potentially funnel part of the market share away from IdealThe implications of such competition can alter the company's trajectory, centering the need to innovate further.

Holding the second spot by revenue, NIO has released exciting numbers, with 61,855 deliveries constituting a record and revenues reaching 18.674 billion yuan, displaying a sequential growth of 7%. Although NIO faces a net loss of 4.413 billion yuan, representing a slight reduction of 2.7%, it has increased its cash reserves to 42.2 billion yuan, reflecting ongoing investment in research and development (R&D), which reached approximately 3.32 billion yuan this quarter—a lead amongst its cohort.

NIO's commitment points towards a sustained high level of R&D engagement

alefox

They project that their quarterly R&D spending will remain around 3 billion yuan through 2025, emphasizing their direction toward maintaining a robust technological edge.

Meanwhile, Xpeng, which was once at risk of lagging in this dynamic market, is now demonstrating rapid recoveryFor Q3, it reported 46,533 vehicles delivered, alongside revenue of 10.1 billion yuan, an impressive growth year-on-year of 18.4%. The net loss narrowed considerably to 1.81 billion yuan, improving by 53.5%, and gross margins improved to a historical high of 15.3%.

Significantly, Xpeng’s collaboration with the Volkswagen Group has yielded fruitful results, with services and other revenue surging by 90.7% this quarter, aided by technological development service fees related to their joint electric and electronic architecture projectHowever, the growing share of budget-friendly models MOMA03 has seen a downturn in pricing expectations, challenging Xpeng to keep gross margins in check while navigating this new pricing landscape.

In terms of their strategic outlook, all three companies disclosed future plans during the financial meeting

The shifting dynamics in the market call for adaptable strategiesExperts believe that China’s EV sector is at the dawn of a substantial reshuffle, with expected penetration rates surpassing 85% and AI technology further redefining the competitive landscape.

In an atmosphere thick with competition, the "Weilai Xiaoli" have started diversifying their growth plans: Ideal is expanding its focus on range-extended models while preparing to enter the pure electric market with charging infrastructure developmentsXpeng is clarifying its aim for profitability in the range-extended segment, and NIO is fast-tracking its multi-brand strategy, expanding coverage across niche markets.

Xpeng anticipates launching four new models in 2025, which includes an innovative super electric version, alongside multiple model upgradesMeanwhile, NIO is pushing forward with the production of the ET9, geared for their prestigious market, and ramping up output for its subsidiary Leida, targeting significant capacity boosts in the nearing months.

In the backdrop of these developments, the burgeoning narrative around the electric car industry portrays a competitive yet transformative environment