Geely banks on petrol-driven cars for profit growth even if EVs gain popularity, CEO says

Geely Auto, China’s second-largest carmaker, has urged the industry to go back to basics by building cars for profit as it banks on petroleum-powered vehicles to propel its earnings despite robust sales of electric vehicles (EVs).

Conventional cars powered by internal combustion engines (ICEs) would still represent 30 per cent of auto sales worldwide owing to consumers’ different tastes and driving habits as well as insufficient EV charging facilities.

“Electric cars do not entirely reflect the transition of the automotive sector,” CEO Gui Shengyue said in an interview with the Post. “As a carmaker, you will lose a profit growth engine if you do not make petrol cars.”

The comments go against popular views that EVs will dominate the industry as more countries adopt global targets to reduce carbon emissions by 2030 and 2050. William Li, CEO of Shanghai-based premium EV maker Nio, said last week that EV adoption rate in China would top 90 per cent by 2027.

Hybrid cars which can run a short distance on battery and switch to fuel for longer drives. would account for 40 per cent of global auto sales while pure EVs would take the remaining 30 per cent share, he predicts. Both hybrid and pure-electric cars fall into the EV category.

“By definition, ICE cars in future will no longer be oil-guzzlers and they have to be fuel-efficient to support the global efforts to reduce emissions,” Gui said. “And they will be made more intelligent, like electric cars.”