Sales of electric vehicles have surged at a remarkable pace in recent years. For context, 17 million units were sold worldwide in 2024 alone, representing a 25% increase on the previous year.
But whether EVs are actually generating profit is a different matter. That is the takeaway from research by Rho Motion: among brands that build only electric vehicles, just four are profitable. The rest are still piling up losses at an eye-catching rate.
Tesla in first place
The study reviewed operating (profit) margins across leading electric-vehicle brands and found that, in 2024, Tesla posted the highest operating margin among the four profitable EV-only makers, at 7,2%.
Even so, it is not all good news. The American manufacturer’s profit margin has been trending down over recent years and has continued to fall in 2025. In fact, in the second quarter of this year (April to June), Tesla reported declines in sales, revenue, profit and margins compared with the same period a year earlier. Take a look:
Close behind is BYD, with an operating margin of 6,4%. Unlike Tesla, the Chinese brand has been improving its operating performance. Analysts say that, if this trajectory holds, BYD could overtake Tesla on profitability this year or next.
Vertical integration could be the key
A large part of the success at Tesla and BYD can be linked to the vertical integration model they have adopted. Under this approach, the company directly controls almost every stage of the production and distribution chain - from making components through to delivering the vehicle to the customer.
This helps shorten development cycles, cut manufacturing costs and makes it easier to scale up, supporting higher profit margins. For instance, BYD controls its batteries end-to-end, from the extraction of raw materials to manufacturing and final assembly within its vehicles. That delivers tighter control over quality and costs, while also reducing reliance on external suppliers.
Vertical integration has clearly worked well for Tesla and BYD, but it does not mean it is the only route to profitability in producing and selling electric cars.
The other two EV-only manufacturers that reported profits were Li Auto and Seres Group, both Chinese. They are the first non-vertically integrated manufacturers to move into the black. For Seres Group - which includes brands such as Seres, Aito and Landian - it is the first time it has recorded profits.
Which brands are still loss-making?
In China, several EV-only brands continue to operate at a loss, including Zeekr (with an operating margin of -8,5% in 2024), NIO, Leapmotor and XPeng. However, the latter two managed to cut their losses by more than half between 2023 and 2024, even though they remain substantial, at above -10%.
NIO, one of the most prominent names in the Chinese market, is still a long way from breaking even. Last year it posted an operating margin above -30%, underlining how much progress is still needed before it can deliver positive results.
Outside China
Beyond Asia, Tesla remains the only EV-only brand running profitable operations. Polestar managed to reduce its losses in 2024, but it is still far from reaching profitability - its operating margin sits at around -50%.
The same goes for the American firms Rivian and Lucid. While the former shows an operating margin of almost -100%, the latter’s figures are stark: -374% in 2024. Even so, that was an improvement on the -500% recorded in 2023. Financial backing from Saudi Arabia’s Public Investment Fund has been crucial in keeping Lucid afloat in the face of such heavy losses.
Light at the end of the tunnel
Despite largely negative outcomes, the study identifies a clear pattern: profitability is drawing closer for electric-vehicle manufacturers. Every maker in the red reduced its losses from 2023 to 2024, and Seres Group posted profits for the first time.
Whether achieved through vertical integration or not, the study highlights one overriding driver of profitability: scale. The narrowing of negative operating margins in 2024 is attributed to the increase in sales seen across all manufacturers.
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