Chinese Automakers' Profits Squeezed by Material Suppliers as Multiple Companies Report Widening H1 Losses
Claire Weston
China's major new-energy automakers posted widening losses or swung to red in H1 2025 — BAIC BluePark, Seres, and GAC all blamed rising raw-material costs — while upstream battery-material supplier CNGR Advanced Material reported profit growth of up to 84%. The margin is migrating from car factories to their suppliers.
How deep are the automakers' losses?
BAIC BluePark expects an H1 net loss of RMB 1.77–1.97 billion. Output rose nearly 38% and sales grew 7.3%, yet losses barely narrowed. This means → selling more cars is not fixing the unit economics.
Seres (赛力斯, Huawei's EV partner) swung from a RMB 2.94 billion profit a year ago to a projected RMB 1.5–1.8 billion loss — a gap exceeding RMB 4.4 billion. Its sub-brand AITO expects a Q2 loss of RMB 1.9–2.15 billion.
GAC Group sees its loss widening from RMB 2.53 billion to as much as RMB 4.57 billion, with profit contributions from its Toyota and Honda joint ventures also shrinking.
Who is capturing the profit?
CNGR Advanced Material (中伟股份) — a global supplier of lithium-ion and sodium-ion battery materials — projects H1 net profit of RMB 1.25–1.35 billion, up 71–84% year on year.
Jiangsu Lopal Tech (龙蟠科技), which makes LFP cathode materials, flipped from a RMB 85 million loss to a RMB 373–447 million profit. Chalco expects net profit of RMB 11.2–12.2 billion.
In plain terms = the price war pushed car prices down, but the bill for materials went up. The profit did not vanish — it moved from the automaker's pocket into the supplier's.
What do the automakers blame?
All three point to rising upstream raw-material costs. Seres named storage chips, industrial metals, and lithium carbonate. BAIC BluePark cited "raw-material price volatility." GAC pointed to a stack of headwinds including higher selling expenses.
Citi analyst Jeff Chung downgraded Seres' Hong Kong-listed shares from "neutral" to "sell", citing cost-inflation margin headwinds, market-share loss, and impairment risk from model transitions.
This reflects a market starting to vote against the "grow revenue, lose money" playbook — the problem is not demand; it is that every additional sale deepens the loss.
What does the industry scoreboard look like?
CAAM data: H1 NEV output reached 7.43 million units (+6.7%), sales hit 7.44 million (+7.3%). Overall passenger-vehicle production and sales both fell about 4% to roughly 15 million units.
Exports were the bright spot — over 5 million vehicles shipped in H1, up 65.3%; June alone topped 1 million for the first time. GAC's own-brand exports hit 121,500 units, up 132%.
This means → the domestic market is now a zero-sum fight. Exports are the only channel still delivering incremental volume.
Can the second half improve?
Automakers are leaning on exports to offset domestic price-war pressure, but sustained export growth depends on trade conditions and overseas demand.
The pivotal variable: whether the structural rise in raw-material costs eases as the price war cools. Put simply = if materials keep climbing while car prices keep falling, the margin corridor only narrows further.
This signals that China's NEV industry has shifted from "whoever sells the most wins" to "whoever has the healthiest cost structure survives."
Content is for reference only, not financial advice.