Geely targets the proportion of electric vehicles in its total sales to be 50% by 2023. A very ambitious target amid weak demand for cars with internal combustion engines.
Chief Executive Jerry Gan said sales of pure electric and plug-in hybrids would account for more than 30% of Geely’s monthly sales in the second half of this year.
According to the latest data from the company, one in five vehicles that Geely sold in the first half was a full electric or hybrid vehicle. Sales of full electric or hybrid vehicles almost quadrupled, in contrast to sales of vehicles with internal combustion engines, which fell 20%.
In the first half of this year, the Hangzhou-based company’s net profit fell by 35% with sales falling 9% in the same semester. The COVID-19 restrictions and the supply chain crisis were cited by the company as the cause of the decline in net profit and sales.
Another challenge is the increasingly fierce competition among manufacturers and the increase in raw material prices also puts pressure on the company’s sales.
China’s automotive sector has faced challenges as restrictions due to Covid-19 have put many areas including the commercial center of Shanghai on lockdown. Some companies have had to temporarily stop production of their cars. Meanwhile, several suppliers are also experiencing the same problem.
The central government has incentivized and halved the purchase tax to 5% for cars priced less than $45,000 and with engines no larger than 2.0 liters.
Nio and Geely plan to build 24,000 battery swap stations across China by 2025
