H1 2026 Automaker Results: Passenger Vehicle Profits Halved, Commercial Vehicles Buck the Trend with 19% Growth
nashnova research
Fifteen passenger-car makers posted a combined RMB 20.2 bn in net profit for H1 2026, down ~45% year-on-year, while eight commercial-vehicle makers earned RMB 9 bn, up ~19% — the same industry, two opposite profit curves.
How much did China's auto sector actually earn in H1?
Fifteen passenger-car companies reported combined net profit of roughly RMB 20.2 bn, down from RMB 36.6 bn a year ago. Twelve saw earnings deteriorate; eight posted losses.
Eight commercial-vehicle companies earned a combined RMB 9 bn, up ~19% year-on-year. All were profitable; six improved.
This means → passenger cars and commercial vehicles sit at opposite points in their cycles: one is absorbing model-transition costs, the other is riding an export boom.
Where did passenger-car profits go?
Profits are extremely concentrated: BYD, Geely, Chery, and SAIC together earned ~RMB 35.1 bn — over 90% of profitable firms' total. The remaining eight companies lost a combined ~RMB 18.4 bn.
Domestic sales hit 8.288 million units, down 24.3%; exports rose 71.7% to 4.432 million units. Shrinking domestic demand forced heavier discounting; exports partially offset the gap.
In plain terms = only the top four made money; the rest are either losing it or about to. The domestic market stalled, and overseas sales are holding the line — for now.
Why did Seres and Li Auto swing from profit to loss?
Seres revenue fell 7.87% to RMB 57.49 bn; it swung from a RMB 2.94 bn profit to a RMB 1.72 bn loss. R&D spending rose 27.44% to RMB 3.73 bn; operating cash flow flipped from a RMB 14.44 bn inflow to a RMB 12.38 bn outflow.
The company cited its main model entering a generational transition in Q2, rising battery and chip costs, and ~RMB 1.57 bn in intangible-asset impairments.
Li Auto swung from a RMB 1.74 bn profit to a RMB 3.98 bn loss. Together the two wiped out ~RMB 10.4 bn in earnings. This means → a model transition is not just a facelift — revenue, costs, and cash flow get hit simultaneously.
Gross margins are rising — so why are profits still falling?
BYD's gross margin rose 0.84 pp to 18.85%, yet net profit still fell 20.54% to RMB 12.33 bn. Geely's gross margin rose 1.6 pp to 17.9%, and net profit edged down to RMB 9.09 bn.
Huachuang Securities data show Q2 sample passenger-car firms lifted gross margins by 0.3 pp year-on-year, but period expense ratios rose 1.4 pp.
In plain terms = the per-car economics have not worsened — but R&D, selling costs, FX losses, and impairments outside the factory gate clawed back the gains.
What is driving commercial-vehicle profits higher?
H1 commercial-vehicle exports hit 664,000 units, up 32.5%, contributing roughly 90% of sales growth. Heavy trucks rose 22.6%; light trucks just 1.3% — exports and heavy trucks are the two profit engines.
Sinotruk posted RMB 4.33 bn in net profit, nearly half the sample total. It exported 108,400 heavy trucks; export revenue rose 54% to RMB 30.91 bn. Yet its gross margin fell from ~15.1% to 13.9%. This means → the extra profit came from volume, not from making more on each truck.
NEV commercial vehicles reached a 30.4% penetration rate, with sales up 40.2%. Analysts note total cost of ownership already beats diesel in some use cases; expansion to long-haul depends on range, payload, charging, and residual value.
Exports saved the short term — can they hold up in H2?
H1 whole-vehicle exports reached 5.096 million units, up 65.3%; NEV exports hit 2.355 million, more than doubling. Chery's overseas revenue share rose from 46.3% to 69.1%; BYD exported 792,000 units, up 68%.
But scaling exports brings costs: shipping, tariffs, certification, after-sales, and overseas factory ramp-ups all eat into gross margin. Great Wall booked RMB 2.27 bn in overseas tax-related subsidies in H1 last year; this period, FX gains fell RMB 1.76 bn. Changan's FX line swung from a RMB 1.36 bn gain to a RMB 230 mn loss.
June dealer inventory hit 1.58 — above the 1.5 warning threshold — with ~2.5 million units on lots. This means → if the gap between wholesale and retail keeps widening, inventory pressure will show up later as discounts, production cuts, or write-downs. Short-term profits propped up by exports still need the domestic market to stabilize.
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