(Bloomberg) -- Geely Automobile Holdings Ltd., the centerpiece of billionaire Li Shufu’s car empire, posted earnings that beat estimates and forecast further sales growth this year.  

Net income rose 9% to 5.26 billion yuan ($764 million) in 2022, the company said in a statement Tuesday, beating analyst estimates of 4.85 billion yuan, according to data compiled by Bloomberg. Revenue climbed 46% to 147.96 billion yuan. 

“During the year, the group sharpened the operational focus on new-energy transformation and significantly accelerated the pace toward this end,” the company said. “The sales volume of new-energy vehicles sold by the group’s two 50%-owned joint ventures increased drastically,” it added.

For more details from the earnings report, click here.

While revenue climbed, the surging costs of batteries, chips and other components, as well as investment into Zeekr — the firm’s new electric-vehicle brand — put pressure on profitability. NEVs, which are accounting for a bigger proportion of the company’s line up, also have lower margins than gasoline cars. All up, gross margin fell 3 percentage points last year to 14.1%, Geely said. 

The company set a sales target of 1.65 million units for 2023, up 15% from last year. Areas where it sees new opportunities include autonomous driving and exports, and it will continue to leverage its relationships with partners such as France’s Renault SA to promote overseas development, according to the statement.

The Hangzhou-headquartered company’s exports rose 72% last year to just over 198,000 units. Sales in China, which accounts for the majority of Geely’s revenue, rose just 2% to 1.23 million vehicles.

Geely is playing catch up in electric cars, the fastest growing segment in China’s auto industry. While its EV sales surged 300% last year from 2021, they totaled just 82,100. That’s a fraction of the 1.86 million EVs, including plug-in hybrids, sold by market leader BYD Co., which has stopped making gasoline-powered cars.  

“Geely has lost our crown of being the No. 1 Chinese homegrown carmaker, to our excellent peer who has created some distance between us,” Geely Executive Director Gui Shengyue said a briefing with investors and media Tuesday, referring to BYD.

China’s domestic market is also increasingly challenging — car sales fell in the first two months of this year from a year earlier and automakers are caught in a price war. 

Chinese Carmaker Geely Joins Auto Price War With $4,350 Discount

Gui said Geely made some strategic mistakes, including pushing a hybrid that ended up flopping, but that the company is confident it can make progress on EVs. 

Geely is leveraging resources from the empire built by Li to catch up. Its high-end EV line, Zeekr, launched in 2021, shares a design team based in Gothenburg with Volvo, majority-owned by Geely. Zeekr sold a healthy 71,000 units in 2022, and the carmaker is launching more models and doubling Zeekr’s sales target to 140,000 this year. 

Li is one of the top shareholders of Mercedes-Benz Group AG and Aston Martin Lagonda Global Holdings Plc, while Geely has two joint venture projects with Renault.   

The company also launched another EV product line called Galaxy under the Geely brand in February, with plans to roll out seven plug-in hybrids and battery EVs over the next two years.  

Geely rose 3.8% in Hong Kong trading Tuesday, its biggest gain in three weeks. The company’s shares are down 17% this year. 

(Adds comments from results briefing.)

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