Electric vehicle sales just capped off 2024 by setting records. This was true in both the United States and China. American car makers General Motors (NYSE: GM) and Ford Motor (NYSE: F) both saw their EV sales spike, resulting in them moving the most EVs in their history. The strength was broader in China, as six automakers hit monthly sales records in December. This extended to two up-and-coming players in the Chinese EV space, ZEEKR Intelligent Technology (NYSE: ZK) and Xpeng (NYSE: XPEV)
It's great to see rising sales. However, it's hard to get too excited if companies aren't also improving profitability. Companies like Rivian Automotive (NASDAQ: RIVN) still have a negative gross margin on their cars. Based on the materials and labor costs alone, the company loses money on every vehicle it sells. Luckily for both Zeekr and Xpeng, that’s not the case. Gross margins are positive and rising. Other profitability metrics are improving as well. Below, I’ll break down the progress these two EV makers have achieved and provide insight into factors that will impact 2025.
