(Bloomberg) — Geely Automobile Holdings Ltd., the Hong Kong-listed arm of billionaire Li Shufu’s auto empire, reported record profit in the first half of the year, boosted by rising exports and rising demand for electric cars.

Net profit rose more than sixfold year-on-year to 10.6 billion yuan ($1.5 billion) in the six months to June 30, the automaker said in a statement on Wednesday. Sales climbed 47 percent to 107.31 billion yuan.

Vehicle deliveries rose 41% to 955,730 units in the first half of the year, with electric vehicles and plug-in hybrids leading the growth. Due to the strong performance, Geely raised its 2024 sales target to 2 million vehicles from 1.9 million.

Geely continues to build on the momentum of its plug-in hybrid range, launching new cars such as the E5 electric SUV with the affordable Galaxy series, while premium brand Zeekr has updated existing models, including global editions of the 009 minivan and Zeekr’s X compact SUV.

“As the growth rate of the Chinese passenger car market slows and price competition becomes increasingly fierce, the group has pursued the strategy of ‘seeking progress while maintaining stability,'” the company said in a statement.

“This strategy enabled the Group’s sales performance in the first half of 2024 to exceed management’s expectations and reach a record level,” it said.

Click here for more details on the results report.

However, rising trade barriers are clouding prospects for global expansion. The European Commission on Tuesday proposed a provisional 19.3% tariff on Geely-branded electric car imports – slightly less than initially announced – and the US quadrupled tariffs on Chinese electric cars to over 100%, effectively locking them out of the market. Other countries, including Turkey and Canada, have taken or are considering similar measures.

Polestar, the electric car brand controlled by Geely Auto’s parent company, saw exports to the EU fall 42% in July after the provisional tariffs took effect. Deliveries fell 37% in the first seven months, according to a study by Dataforce. The Swedish brand is listed separately in the US, but faces similar challenges to Geely Auto’s electric car exports.

To avoid the tariffs, Zeekr says it is working to move some of its production to Europe, while other brands controlled by Geely Holding, such as Polestar and Volvo Cars AB, are in the process of moving production of some of their models to South Carolina and Belgium.

Geely Auto is also battling an extremely competitive domestic market, where a price war is eating into automakers’ profits and a faltering economy is hurting consumer spending on expensive items like new cars. To boost auto spending, the government has introduced a scrappage scheme for buyers who trade in old cars for new qualified electric cars and fuel-efficient gasoline cars. Discounts are as high as 20,000 yuan.

Manufacturers like Geely would benefit from the subsidy, as Bloomberg NEF estimates that this measure could boost sales of 1.1 million electric vehicles worth around $26 billion.

– With support from Anthony Palazzo.

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