Great Wall Motor's Earnings Momentum and Strategic Position in China's EV Market

In a Chinese automotive sector marked by slowing growth and margin compression, Great Wall Motor (GWM) has carved out a compelling narrative through its strategic pivot to electrification and disciplined capital allocation. The company's H1 2025 earnings report, while not immune to industry headwinds, reveals a resilient business model and a forward-looking vision that positions it as a standout player in the EV transition. For investors seeking undervalued opportunities in a fragmented market, GWM's balance sheet strength, NEV momentum, and global expansion efforts warrant close attention.

Earnings Resilience Amid Sector-Wide Challenges

Great Wall Motor's H1 2025 results reflect the dual pressures of a maturing ICE (internal combustion engine) market and the high costs of transitioning to EVs. Total revenue rose by 1.03% year-on-year to CNY 92.37 billion, driven by a 12.86% spike in June 2025 vehicle sales (110,700 units). However, net income dipped by 10% to 6.34 billion yuan, a decline attributed to increased R&D and capex for NEV platforms and overseas infrastructure. This trade-off between short-term profitability and long-term growth is a hallmark of GWM's strategy.

What stands out is the company's ability to maintain a 6.92% year-on-year increase in shareholders' equity, even as operating margins contracted. This resilience is underpinned by a 16.70% YoY rise in NEV sales (124,009 units in Jan–May 2025), which now account for over 30% of total sales. While margins in the NEV segment remain thin due to battery costs and subsidy phaseouts, GWM's early investments in solid-state battery partnerships and vertical integration are expected to drive margin expansion by 2026.

Strategic Positioning: NEV Growth and Global Ambitions

GWM's competitive edge lies in its dual focus on product diversification and geographic expansion. The Haval brand dominates domestic sales (56% of May 2025 units), but the Tank and Ora brands are gaining traction in off-road and compact EV niches. More importantly, GWM's NEV segment is outpacing the broader market. In May 2025, NEV sales surged 32.41% YoY to 32,638 units—a figure that underscores the company's ability to capture market share in a sector where BYD and Chery are also aggressively expanding.

Overseas expansion further differentiates GWM. Despite a 3.55% YoY decline in cumulative overseas sales (157,590 units from Jan–May 2025), the company's June 2025 overseas sales rose 0.17% YoY to 34,535 units. This growth is fueled by strategic partnerships in Southeast Asia and Africa, where GWM's cost-effective ICE-to-EV hybrid models are resonating with price-sensitive consumers. Analysts project that GWM's overseas sales could contribute up to 30% of total revenue by 2027, a critical buffer against domestic market volatility.

Competitive Resilience: Navigating a Slowing Sector

While GWM's H1 2025 sales growth (1.81% YoY) lags behind BYD's 25% and Chery's 18%, its NEV-centric strategy is already paying dividends. The company's NEV sales now represent 28% of total units—a figure that dwards the 15% average for traditional automakers. This shift is not just volume-driven; it's a strategic hedge against ICE margin erosion.

The recent 32.41% MoM surge in NEV sales (May 2025) suggests that GWM's product pipeline—anchored by the upcoming ORA 05 EV and a 2026 battery-swapping network—is gaining traction. Moreover, the company's 6.92% increase in shareholders' equity, despite a 10% net income drop, highlights its ability to reinvest in high-return projects. By contrast, peers like BYD are grappling with inventory overhangs and subsidy rollbacks, which have pressured their margins.

Investment Case: A Long-Term Play on EV Transition

For investors, GWM's current valuation offers an intriguing entry point. At a P/E ratio of 8.5x (as of July 2025), the stock trades at a 40% discount to the sector average, despite its leadership in NEV adoption. Analysts from Smartkarma and Moomoo have assigned a “Buy” rating to GWM, citing its robust balance sheet (CNY 92.37 billion in revenue, 2.17% asset growth) and strategic alignment with China's 2030 EV targets.

The key risk lies in execution: Can GWM scale its NEV production to meet 2025–2026 demand? The company's recent 10,000-unit monthly production ramp at its Shijiazhuang plant, coupled with a 15% reduction in battery costs via lithium recycling, suggests a “yes.” Additionally, the 24 “Buy” ratings from analysts, including a HK$23.00 price target (18% upside from current levels), reflect confidence in GWM's ability to navigate near-term margin pressures.

Conclusion: Reallocating Capital for the EV Era

Great Wall Motor's H1 2025 results may not dazzle on the surface, but they tell a story of disciplined reinvention. By prioritizing NEV innovation, global expansion, and shareholder equity growth, GWM is positioning itself as a long-term beneficiary of China's EV transition. For investors with a 3–5 year horizon, the company's undervalued stock, strong unit economics, and strategic moats make it a compelling candidate for capital reallocation—especially as the sector consolidates around electrification.

In a market where most automakers are betting on subsidies and scale, GWM is betting on adaptability. And in the EV era, adaptability is the new currency.