Zeekr Group's Q2 Surge: Can Innovation and Execution Drive Long-Term Growth?

The electric vehicle (EV) market is a high-stakes arena where innovation, scale, and execution determine survival. Zeekr Group's preliminary Q2 2025 results reveal a company charging ahead with aggressive growth, but questions linger about its ability to sustain momentum against rivals like Tesla and NIO. Let's dissect the numbers to assess whether Zeekr's strategic bets—on R&D, premium models, and global expansion—are paying off.

Financial Performance: Growth Amid Persistent Losses

Zeekr's Q2 revenue surged to RMB 20.04 billion ($2.76 billion), a 58.4% year-over-year increase and 36% sequential rise, driven by strong demand for its premium EVs. Gross margin expanded to 17.2%, up from 12.3% in Q2 2023, reflecting cost efficiencies in battery production and component procurement. However, the company still reported a net loss of RMB 1.81 billion, though this narrowed by 10.5% sequentially and 36.8% under Non-GAAP terms, signaling improving operational discipline.

The critical question: Can Zeekr's revenue growth outpace its losses? While profitability remains elusive, the margin improvements and narrowing losses suggest progress. The company's R&D spending, up 89.6% YoY to RMB 2.62 billion, is a double-edged sword—critical for sustaining innovation but a drag on near-term earnings.

Product Innovation and Market Penetration

Zeekr's Q2 deliveries hit 54,811 vehicles, a 100% YoY jump, with its flagship models like the Zeekr 7GT (0-100 km/h in 2.95 seconds) and upcoming Zeekr 9X (launching Q3 2025) positioning it as a challenger in the luxury EV segment. Meanwhile, its Lynk & Co 900 SUV, equipped with NVIDIA's DRIVE AGX Thor chip (700 TOPS processing power), secured over 40,000 pre-orders, underscoring demand for mid-to-high-end tech-driven vehicles.

Yet, Zeekr trails peers in absolute scale. Li Auto delivered 111,074 vehicles in Q2, while NIO sold 72,056 units. However, Zeekr's year-over-year delivery growth (100%) far exceeds NIO's 25.6%, suggesting stronger momentum. The company's cumulative deliveries for 2025 (244,877 as of June) reflect a 14.5% YoY increase, though this lags Li Auto's 111,074 Q2 alone.

Supply Chain and Cost Efficiency: A Key Differentiator

Zeekr's gross margin expansion to 17.2% highlights progress in managing its supply chain. The firm cited procurement savings and product mix adjustments as drivers, particularly in battery margins. This contrasts with peers like NIO, which faces margin pressure from price wars. However, sequential declines in battery component sales (down 16.1% from Q1) suggest inventory management challenges, a risk as demand fluctuates.

Competitive Landscape: Where Does Zeekr Stand?

While Zeekr's parent, Geely, holds the second-largest NEV market share in China (10.3%), Zeekr itself is not among the top five standalone NEV players. BYD dominates with 31.7% market share, followed by Geely (including Lynk & Co), Changan, and Tesla. Zeekr's premium focus and global ambitions—evident in its silicon carbide-powered e-motors and plans to expand into Europe and the U.S.—could carve a niche, but execution is critical.

Risks and Challenges

• Price Competition: Lower average selling prices due to product mix shifts could compress margins further.
• Inventory Management: Sequential dips in battery sales hint at overstock risks.
• Global Ambitions: Entering markets like Europe requires robust supply chains and brand recognition.

Investment Thesis: Buy the Growth or Wait for Profitability?

Zeekr's Q2 results paint a company leveraging its R&D investments to fuel growth, with premium models and advanced tech (e.g., NVIDIA's Thor chip) creating differentiation. Its delivery growth outpaces peers, and narrowing losses suggest operational improvements. However, the stock's valuation must balance this potential against persistent losses and execution risks.

Key Metrics to Watch Ahead of August 14 Earnings:
- Margin Stability: Can gross margins hold above 17% as R&D costs rise?
- Global Expansion: Orders for the Zeekr 9X and Lynk & Co 900 SUV in new markets.
- Cash Position: With RMB 8.05 billion in cash, liquidity is manageable, but capital-intensive projects could strain reserves.

Conclusion: A Buy with a Focus on Long-Term Potential

Zeekr's Q2 results signal a company making strides in innovation and market penetration, but profitability remains a hurdle. For investors willing to bet on its premium EV strategy and global expansion, the stock could offer upside—especially if margins stabilize and deliveries accelerate beyond Q2's strong base. However, the August 14 earnings release will be pivotal; robust Q3 guidance and margin improvements could justify a buy rating, while setbacks may warrant caution.

In the EV race, Zeekr isn't just playing catch-up—it's redefining the赛道 (track). The question is whether investors are ready to bank on its drive.