China's electric-car makers began the second half of the year by showing off their volumes — and reminding everyone why those volumes don't yet translate into profit.

The numbers

NIO delivered about 107,700 vehicles in the second quarter, up roughly 49% year over year, with June deliveries jumping about 63% to around 40,600, the company said. XPeng delivered about 40,100 in June and topped 103,000 for the quarter, it reported, as it readies its mass-market Mona L03 sedan. Rival Li Auto delivered roughly 31,000 in June. (Monthly delivery counts are the headline metric investors watch for these companies.)

NIO and XPeng are US- and Hong Kong-listed Chinese EV startups that compete with market leader BYD and a crowd of others in the world's largest EV market.

Volume without profit

Here's the catch. China's EV market is fiercely oversupplied, and a years-long price war has crushed profitability. By some industry measures, profit margins across China's auto sector fell to around 3% — a record low — with gross profit of only about $2,000 per vehicle, the South China Morning Post reported. Even BYD, the volume leader, has seen profit fall sharply despite selling huge numbers of cars, and Beijing has moved to ban below-cost selling to cool the war.

NIO has managed to improve its margins (its vehicle gross margin rose to around 19% early this year on higher-priced models), but the company — like most of its peers — still loses money overall. In short: strong deliveries ≠ strong earnings.

(Explainer: gross margin is what's left after the direct cost of making each car; a price war is competitors repeatedly cutting prices to win share, which lifts volumes but shrinks the profit on every sale.)

The export front — and the tariff wall

Facing a saturated home market, Chinese EV makers are pushing hard into exports. But they're running into tariff walls built to protect Western carmakers: the US effectively blocks Chinese EVs with a 100% tariff, and the EU has imposed duties of up to roughly 35%. That collision — cheap, capable Chinese EVs versus protectionist barriers — is one of the defining tensions in the global auto industry, and a thread Boursel has followed alongside BMW's US EV plant and the broader tariff era.

Why it matters

For China's EV industry, the June figures show demand and share gains are real — these companies are making and selling a lot of cars. For investors, they're a reminder that in this market, growth and profit have decoupled: volumes soar while margins stay razor-thin, and shakeout risk looms for weaker players. And for the global auto business, the rise of capable, low-cost Chinese EVs — bottled up by tariffs but expanding where they can — is reshaping competition for legacy giants in Detroit, Germany and Japan. Boursel offers no view on any carmaker's stock; the takeaway is that China is building and selling EVs at extraordinary scale — the unresolved question is who, if anyone, makes money doing it.