[Automotive Man] Top 3 Independent Automakers: Each Has Strengths

From the first three-quarter report, it is evident that in the era of intense competition, leading automakers have taken three distinct survival paths.

Author | Chen Weidong

In the first three quarters of 2026, beneath the appearance of a market recovery, the profit floor of automakers continued to break. The stock game has entered the deep water zone, and the core of competition has shifted from fighting for share to finding a sustainable survival paradigm.

Price wars are no longer short-term promotional tactics, but the underlying norm in the current domestic car market. When many automakers fall into the dilemma of "losing money if volume increases, harder to sell if not", the halo of sales figures is quickly fading.

Facing the same harsh industry challenge, BYD, Geely, and Chery submitted three reports with distinct styles. The 2026 third-quarter financial reports were released simultaneously. The sales of the three leading independent automakers rose in sync, but their strategies for breakthrough were clearly distinct.

BYD resists cyclical shocks with heavy-asset barriers across the entire industry chain; Geely initiated structural and organizational reforms inward to extract profit elasticity from the existing market; Chery anchored on the overseas market, using overseas profits to buffer domestic competitive pressure. All three paths have their own dividends but also come with long-term challenges that cannot be avoided.

BYD: Industry Chain Barriers Resist the Cycle

When peers competed to cut prices for orders, BYD did not dive into the low-end price melee.

In the first three quarters of 2026, BYD's cumulative sales reached 3.1316 million units, still leading the global new energy vehicle market, but sales were down 3.94% year-over-year; revenue achieved 566.304 billion yuan, up 0.01% year-over-year; net profit attributable to shareholders was 22.345 billion yuan, down 4.24% year-over-year; net profit excluding non-recurring items was 21.004 billion yuan, up 2.51% year-over-year.

Revenue rising steadily and profits falling slightly is not due to weakening operations, but rather active choice—sacrificing short-term book profits to invest in long-term technology foundations.

For many automakers, the root cause of profit decline is the loss of terminal selling prices and the passive breach of gross margins. BYD's profits were diluted by two rigid investments: continued R&D for high-end intelligent driving and new-generation battery platforms; infrastructure construction, production line debugging, and local supply chain cultivation at overseas bases such as Thailand, Brazil, and Hungary. The ramp-up cycle for overseas complete vehicle projects is generally 18 to 24 months, and production capacity utilization is low in the early stage of production, temporarily dragging down performance.

The core supporting BYD's resistance to cycles is the industry's rare deep vertical integration system. Cathode materials, battery cells, motors and motor controllers, and high-voltage core components are mostly self-developed and self-made. Blade Battery external supply continues to scale up, combined with double-digit growth in energy storage business, forming a second revenue curve outside passenger cars.

This closed loop gives it unique cost adjustment space: Competitors' price cuts mostly directly eat into per-vehicle profits, while BYD can rely on internal support to share some pressure. This is also the foundation for its stable positive profitability in a low-margin industry environment.

The market has long discussed that BYD has a rich SKU and a crowded product matrix with internal diversion. At the channel level, it is evident: the Dynasty and Ocean series stabilize production and the base; Fangcheng Bao anchors the 400,000-yuan off-road segment; Yangwang secures the million-yuan high-end segment; commercial vehicles and energy storage can share manufacturing resources with passenger cars to smooth quarterly fluctuations.

Under the layered layout, it does not need to rely on low-price involution for volume, but instead relies on system resilience to digest market shocks.

However, the heavy-asset model is inherently a double-edged sword. Battery production lines require huge investment and are highly specialized. Once demand slows and capacity utilization drops, depreciation costs will rise quickly. Some models have overlapping price bands and customer groups, and internal diversion objectively exists.

The bigger concern is that existing capacity is highly bound to the Lithium Iron Phosphate Blade Battery route. If semi-solid and solid-state batteries accelerate commercialization, this batch of specialized production lines will face impairment pressure. Although BYD is simultaneously laying out frontier technology research, the difficulty of switching main production capacity is extremely high. Combined with compliance, labor, and supply chain cultivation issues accompanying overseas factory construction, overseas business profit realization will require more time.

Domestic competitive space has bottomed out, and systematic overseas expansion has become a key increment and safety buffer for BYD. It is no longer simply exporting knock-down kits, but implementing localized full-chain solutions, bringing the entire system of production capacity, supporting facilities, certifications, and after-sales services overseas to circumvent tariff barriers. High-margin overseas markets continue to hedge against domestic pressure. Going global has upgraded from a second growth curve to its survival bottom line to traverse the cycle.

The signal conveyed by BYD's financial report is clear: in stock competition, industry chain control capability is the hardest moat. Trading short-term profits for technology and global foundation is the heaviest and hardest path to replicate for independent brands. Of course, it also requires higher judgment of cycles and global operation capabilities.

Geely Automobile: High Profitability Runs in Zero-Profit Zone

If BYD relies on heavy assets to brace against the cycle, Geely's solution is more inward: in this almost unprofitable stock market, extracting profit elasticity is also the brightest one among the top three independent automakers in terms of short-term profit realization.

In the first three quarters of 2026, Geely Automobile's cumulative sales reached 2.2355 million units, up 3% year-over-year; revenue achieved 272.564 billion yuan, up 13% year-over-year; net profit attributable to shareholders was 13.928 billion yuan, up 7% year-over-year.

Sales increased by an additional 3%, revenue by an additional 13%. Revenue growth continuously outperformed sales growth, reflecting that the average selling price per vehicle and product premium capacity are steadily rising. Profit structure changes are clear: ZEEKR contributed high-end profits continue to rise, Galaxy stabilizes the mainstream sales base, Lynk & Co overseas increments continue to be released, traditional fuel business shrinks orderly, resources are concentrated on high-value sectors.

Many automakers are trapped in the vicious cycle of "price cut—gross margin decline—supplier exploitation". Geely jumped out of this inefficient logic. The core grip is product structure upgrade, brand upward, and high-value overseas expansion.

In the first three quarters of this year, Geely New Energy cumulative sales reached 1.3264 million units, up 14% year-over-year; overseas exports 797,700 units, up 169% year-over-year.

ZEEKR stands firm in the high-end pure electric track, with per-vehicle gross profit significantly higher than the group average; Galaxy covers the 100,000–200,000 yuan mainstream market, safeguarding channel cash flow and production capacity base; Lynk & Co relies on sports labels to maintain niche premiums overseas; China Star hybrids continue to undertake replacement demand for joint venture fuel. Data shows, ZEEKR brand cumulative sales reached 288,400 units, growing 101% year-over-year, of which exports were 83,000 units, directly pulling up the group's average selling price and profitability.

This round of profit improvement is not an accidental dividend brought by a single hit, but the result accumulated over the past two years of organizational reconstruction and brand sorting.

At a recent communication meeting, Geely Automobile An Conghui also faced the old problems of the internal matrix directly: Lynk & Co's past product positioning was vague, and the differentiation from other brands in the group was insufficient. Next, a comprehensive brand reshaping will be launched; Galaxy will fill in the waistline hits and perfect the pure electric and plug-in hybrid product matrix; China Star series will be equipped with Super HEV technology on a large scale to strengthen fuel replacement advantages.

Supporting strategies have also been clarified: A new five-year strategy targeting 2030 will be released in the fourth quarter of this year. The core idea is to contract redundancy, focus on the core, reduce R&D budgets for niche and inefficient models, and concentrate resources on technology iteration, all-domain AI ecosystem and user experience. Brand simplification, channel integration, unified R&D middle platform, and centralized supply chain procurement, building an architecture of "middle platform cost control, front-end differentiated competition", sales and management expense ratios continue to optimize, management dividends continue to be released.

Unlike many automakers expanding multi-brands and falling into internal friction, Geely's current stage has brand synergy greater than competition. The results of backend cost reduction are directly converted into front-end product competitiveness. This is the underlying logic of profits rising against the trend.

The deeper the middle platform integration, the stronger the cost advantage, but it is also prone to technology and design language convergence. Once balance is lost, it will slowly dilute the unique tone of each brand and erode the foundation of brand premiums in the long term.

In terms of going overseas, Geely took a lightweight alliance route completely different from BYD, coordinating Volvo, Renault, and Proton to collaboratively layout production capacity and channels, with lower capital expenditure, promoting high-end models landing in Europe and new energy products scaling globally, carving out a sample path of value overseas expansion.

Geely's financial report provided another answer to the industry: The car market never lacks sales; the ability to make money stably is the scarce product. In an environment of comprehensive involution, refined operations, structural optimization, and efficiency improvement can also traverse the winter.

Chery Automobile: Overseas Market Hedges Domestic Involution

Comparing BYD's heavy barriers and Geely's internal efficiency, Chery's route is the most pragmatic and has the highest recognition: placing the profit base overseas to hedge against domestic red sea involution.

In the first three quarters of 2026, Chery Group achieved revenue of 241.234 billion yuan, up 12.29% year-over-year; gross profit 39.004 billion yuan, up 32.38% year-over-year; gross margin 16.17%, up 2.46 percentage points year-over-year; net profit attributable to shareholders 13.963 billion yuan, down 2.8% year-over-year. Overseas business has become the core profit source of the group.

Chery's operational logic is very straightforward: low margin to chase scale domestically and polish technology; stable profits and cash flow overseas. Domestic pricing is restrained, prioritizing stability of channels and capacity, equivalent to an experimental field for hybrid and chassis technology; relying on over twenty years of accumulated overseas dealer networks, in Latin America, Middle East, and Southeast Asian markets, models adapted to local road conditions can achieve higher per-vehicle gross profit than in domestic.

One attack and one defense, one thin and one thick, forming natural risk hedging, allowing it to remain steady when peers bear pressure.

On technology routes, Chery chooses a stable route, avoiding high-investment, high-uncertainty frontier tracks, establishing a "Hybrid Main, Pure Electric Auxiliary" globalization scheme. Yaoguang C-DM hybrid has high tolerance for fuel and road conditions, low maintenance costs, suitable for overseas markets with imperfect infrastructure, is the main force for going overseas.

Brand matrix division of labor is clear: Main brand stabilizes the national base, Jetour deep dives into outdoor off-road, iCAR goes pure electric for young groups, Exeed carries upward tasks. Each brand's goals are clear, not blindly following involution.

In R&D investment, resources are prioritized to practical technology and overseas adaptation. First three quarters of 2026 R&D expenses 11.046 billion yuan, focused on hybrid systems, chassis calibration, and localization adaptation. High-end intelligent driving self-research investment is relatively restrained. This is active choice, also meaning on the intelligent track, it still has a catching-up distance.

Chery's risk also comes from its own advantages. Profits are highly bound to overseas emerging markets. Performance will fluctuate with geopolitical policies, exchange rates, and regional demand, and profitability stability has shortcomings. Back to domestic, Exeed lacks a 300,000-yuan benchmark hit for years, user minds remain on cost-performance, brand upward pace is relatively slow.

But it cannot be denied that going overseas is not a bonus item for Chery, but a survival foundation. Long-term stable first tier of independent exports, mainly with light-asset KD mode, capital expenditure controllable, overseas production and sales system mature. In an environment of increasing geopolitical friction and trade barriers, this overseas base deeply cultivated for many years gives it sufficient ease.

Chery's enlightenment is simple enough: Domestic red sea competition is hard to stop, stable profit buffers are often hidden in global layout. Not relying on gimmicks, not actively starting low-price wars, steady overseas expansion is the path with the highest error tolerance in independent brands.

Fundamental Divergence

Reviewing the 2026 third-quarter report, the fundamental divergence of the top three independent automakers is already clear:

BYD takes the heavy barrier route: using whole industry chain control to exchange for long-term global discourse power; Geely takes the superior management route: relying on organizational change and product structure optimization to dig out stock profit elasticity; Chery takes the globalization route: relying on overseas profit base to hedge domestic cycle risk.

The three paths have no superiority or inferiority, rooted entirely in each company's resource endowment and strategic genes. Every route has confirmed dividends and is accompanied by long-term unresolved structural topics.

Price wars and stock involution will be the norm. In the future, automakers will compete not in short-term sales rankings, but in comprehensive strength: barrier thickness, operational efficiency, growth base diversity, and risk dissolution capability.

There is another proposition in the industry worth continuous observation: In the three routes, is there a final optimal solution? If overseas markets cool down synchronously, intelligent competition widens the generation gap, relying only on a single model, can it still stand firm?

Looking at the extended cycle, the leader who can truly traverse multiple downward cycles will not stick to one track, but has the ability to dynamically balance and complement each other among industry chain barriers, organizational efficiency, and global layout.

The big waves wash away the sand, the cycle leaves the strong.

After 2026, the fundamental elimination competition for independent brands has just begun. [Copyright Notice] This article is original from "Automotive Man", all rights reserved by the publisher. Unauthorized reproduction or partial copying is strictly prohibited.