High-quality development of new energy vehicles, let's look at ESG indicators

Prologue: Facelift! Price cuts! Zero down payment! The competition in the new energy vehicle (NEV) market is intensifying in 2024. Geely Auto, driven by ESG for high-quality development, may become a beneficiary of the Matthew Effect!

Since last year, industries across the board have been focusing on high-quality development. But for automakers, what exactly constitutes high-quality development?

Price cuts? I don’t think so! Historical price wars in other sectors show that slashing prices alone could lead to "cutting corners," compromising product quality. Price cuts ≠ high-quality development. Only automakers that align with the "new quality productivity" trend and meet consumer/societal needs truly embody "high-quality development."

High-quality development is a flexible constraint with few quantifiable metrics. The only universal benchmark globally is ESG! In 2023, Geely Auto was selected for the first time as a constituent of the Hang Seng Corporate Sustainability Index, with its MSCI ESG rating upgraded to AA. In S&P Global’s "Sustainability Yearbook 2023 (China Edition)," Geely ranked first among Chinese automakers in ESG performance. It also secured 8th place (top among Chinese automakers) in CCTV’s "China ESG Listed Companies Pioneer 100" list.

$GEELY AUTO(00175.HK) leverages a four-tier ESG management framework to drive six strategic ESG directions, transforming "new quality productivity" into performance and empowering brand globalization. As the Matthew Effect intensifies, Geely Auto is poised to stand out!

1. NEVs enter the "smart tech" phase, with ESG driving Geely’s "digital innovation."

CPCA data shows that from April 1–14, China’s NEV wholesale/retail penetration rates both exceeded 50%, marking the official start of the industry’s "second half."

"Oil-electric price parity" has boosted NEV adoption, but price cuts erode profits and aren’t the optimal path for "high-quality development."

A 2023 survey revealed that consumers prioritize smart features in NEVs, now ranking second (up from third in 2021–22). Smart cars enhance user experience and enable global expansion via advanced manufacturing—the key to winning the NEV "second half."

Geely began building smart car capabilities in 2018, targeting its "One Network, Three Systems" vision by 2025.

(Geely’s "One Network, Three Systems" blueprint)

By end-2023, Geely had established differentiated advantages in chips, autonomous driving systems, and computing power.

Only two automakers globally mass-produce self-developed high-performance chips: Tesla and Geely. Geely’s 7nm "Dragon Eagle One" chip delivers 250K DMIPS CPU and 256 TOPS NPU performance, rivaling Qualcomm’s premium 8155 SoC. One chip supports L2++ autonomy; two enable L3; four achieve L4. Over 230,000 units have been shipped.

For infotainment, Geely and Meizu co-developed Flyme Auto, powered by dual "Dragon Eagle One" chips and Geely subsidiary ECARX’s Antora 1000 PRO platform. Flyme Auto offers seamless operation, multi-command processing, rapid response, streamlined UI, and deep personalization. Its cross-device integration aligns with driving habits, enabling seamless phone-to-car transitions.

In computing, Geely’s Xingrui AI Cloud hit 10.2 exaflops in 2023, supporting 3.5M concurrent vehicle calculations and boosting R&D efficiency by 20%.

In early 2024, Geely launched Xingrui AI—the auto industry’s first full-stack, self-developed AI model with the richest scenarios, strongest computing, deepest expertise, and highest data security. Applications like "AI Digital Chassis" are already live.

(CPCA website)

ZEEKR holds over 8% market share in China’s L2+ segments (¥240K–320K and ¥320K–400K). Orders and share reflect consumer trust.

Among ~20 China-market NOA-capable models, ZEEKR (001/007/009) and Galaxy (L7/E8) cover ¥200K–600K ranges. Geely’s offerings lead in value—e.g., Galaxy E8’s HD maps + 116 TOPS chipset at just ¥218,800—delivering premium tech at accessible prices.

For OTA updates, ZEEKR was the only brand with monthly upgrades in 2023.4–2024.3; Lynk & Co and Geely also ranked top.

In the NEV "first half" (battery/motor/electronics), some Chinese brands scaled via supply chain advantages. Geely caught up fast, innovating architectures like Lynk’s EM-P super PHEV (8 smart controls) and Thunder Hybrid (next-gen system targets 2,000km range, 2L/100km).

For BEVs, the new ZEEKR 001 features an 800V platform. Geely’s "Gold Brick Battery"—the world’s first mass-produced 800V LFP pack—cuts parts by 35%, boosts density 10+, and achieves 83.7% volumetric efficiency. Geely’s "three-electric" tech is transitioning from leading to surpassing.

Now in the "smart tech" phase, chips, LiDAR, and computing dominate cost competition—where Geely excels. Sales validate this confidence.

2. ESG propels Geely’s brand, driving top-tier sales growth.

(1) ESG strengthens Geely’s brand as a long-term growth catalyst.

In 2023, Lynk & Co, ZEEKR, and Galaxy grew steadily, with total sales up 18% to 1.687M units (NEVs: 487K, +48%)—outpacing China’s overall auto/NEV growth.

(Geely Auto financials)

2023 revenue hit a record ¥179.2B; net profit reached ¥5.308B, the best since 2021.

(Geely Auto announcement)

Q1 2024 NEV sales surged ~143% to 144,100 units.

By brand: Galaxy sold 38,528; Lynk & Co 61,056 (+64%); ZEEKR 33,059 (+117%). The new ZEEKR 001 secured 30,000+ orders in its first month!

(CPCA website)

Geely’s Q1 retail sales grew 46.2%—#2 among top 10 automakers. NEV sales rose 143.2%, ranking #2 among Chinese brands.

(2) Stricter NEV standards abroad give ESG-strong Geely an export edge.

China’s NEV/smart car supply chain excels, with huge export potential. ESG is Geely’s golden ticket.

Overseas markets enforce stricter rules on privacy, data security, and carbon. For example, while China’s "dual-credit" policy rewards NEV sales, the EU fines automakers €95 per gram of excess CO2/km. Geely developed 3 recycled plastics, 8 eco-materials, and 7 lightweight techs in 2023, deploying them in ZEEKR 001, Lynk 08 EM-P, and Galaxy E8 (12% lifecycle carbon reduction). Geely’s 2045 carbon-neutral target beats European peers. ESG-backed Geely earns overseas trust.

In 2023, Lynk & Co expanded in the Middle East/SE Asia (Europe in early stages), with APAC/Mideast sales up 150%. ZEEKR 001/X began overseas deliveries, with direct stores in Sweden/Netherlands. Q1 2024 exports jumped ~66% to 87,000 units. ESG-derived cost/low-carbon advantages make Geely China’s most promising auto exporter—"Geely for the world" is within reach!

Geely plans 9 new 2024 models to expand its smart-driving lineup, targeting 66% NEV sales growth. Precise guidance reflects its ESG prowess.

3. Global ESG accolades position Geely as a future top-tier automaker.

Beyond tech, Geely’s safety, governance, and stakeholder returns form enduring advantages.

(1) Safety: Zero fire incidents in ZEEKR models with "Polar Core" batteries. The "Gold Brick Battery" upgrades safety to 8 measures with a cage structure, enduring 4,000V DC (27% improvement).

2023 tests: Galaxy E8 survived a 20-ton truck side crash; Galaxy L6 a high-speed triple collision; ZEEKR 009 a 30-ton mixer truck roof crush; Lynk 08 EM-P a 60km/h side-pole impact. In 2024, Geely’s "AI Digital Chassis" completed ice-road drifts. Owners enjoy peace of mind.

Six Geely models earned C-NCAP 5 stars; one got Euro NCAP 5 stars. Galaxy L7 is China’s first PHEV SUV with C-NCAP 5 stars; Galaxy E8 secured China’s first 6D electric safety certification. Lynk leads mainstream ICE reliability (VDS) and smart experience studies.

(2) Governance/capital markets: In 2023, Geely’s independent directors rose to 42%; nomination/compensation committees are 100% independent. Governance improved.

Geely tier-manages supply chain risks: 94% of Tier-1 suppliers signed its Code of Conduct; 85% completed sustainability self-assessments; 77% of new suppliers passed ESG audits; 120 underwent third-party ESG checks; 100% of dealers received compliance training; 98% attended sustainable marketing sessions. By 2024, high-risk suppliers will undergo 100% due diligence; by 2025–26, all Tier-1/key non-Tier-1 suppliers will be assessed. Rigorous ESG ensures quality and prepayment security.

(iFind)

Since 2010, Geely’s dividend payout ratio climbed steadily from 10% to 20%, then 30%. Its proposed 2023 dividend (HK$0.22/share) would exceed 40%—rewarding shareholders.

High ESG ratings grant Geely global capital market access. Overseas investors favor high-ESG firms. China’s "New National Nine Articles" also push listed companies to improve governance and dividends, attracting long-term capital. For capital-intensive automakers, lower financing costs from high ESG are a hidden edge.

(3) Customer service: As NEV ownership grows, aftersales matters. In 2023, China’s "Automotive Aftermarket Guidelines" emphasized service upgrades and green repairs. Geely ranks #1 in after-sales satisfaction (CSI); ZEEKR leads NEV customer experience (NEV-CXVI). Owners needn’t fear repair hassles.

Historically, top auto brands hailed from developed markets, while Chinese automakers lagged in influence. NEVs/smart cars offer a chance to leapfrog. ESG is the "global passport" for ambitious Chinese automakers. Geely—with its "smart mobility innovation ecosystem"—has breached the walls, and the world beyond is now in clear view!