Nio had the lowest deliveries in the fourth quarter, but regained the highest R&D expenses, setting the stage for future growth.

As of today, three of China's leading electric vehicle makers, Nio (NYSE: NIO, HKG: 9866), Xpeng Motors (NYSE: XPEV, HKG: 9868) and Li Auto (NASDAQ: LI, HKG: 2015), have all reported their fourth-quarter earnings.

As always, we are comparing their key financials to give readers a better idea of where these three companies stand.

After surpassing Nio in the third quarter to become the company with the highest delivery volume of these three companies, Xpeng's lead in delivery volume in the fourth quarter widened even further.

The following are the vehicles delivered by these three companies:

Xpeng: 41,751 in the fourth quarter, compared to 25,666 in the third quarter.

Li Auto: 35,221 in the fourth quarter, compared to 25,116 in the third quarter.

Nio: 25,034 in the fourth quarter, compared to 24,439 in the third quarter.

The comparison of their deliveries also demonstrates to some extent the market space targeted by their respective models, showing that the higher the price of the vehicle, then the lower the deliveries.

Although Xpeng had the highest deliveries, it had lower revenue than its two peers in the fourth quarter because the vehicles were priced lower.

Li Auto's revenue in the fourth quarter was RMB 10.6 billion, higher than Nio's RMB 9.9 billion and Xpeng's RMB 8.56 billion.

Li Auto also had the highest gross margin of the three companies, outperforming Nio and Xpeng for the third consecutive quarter.

In the fourth quarter, Li Auto's gross margin was 22.4 percent, compared to 17.2 percent for Nio and 12.0 percent for Xpeng.

In terms of R&D expenses, Nio has led for several quarters since 2020, but was surpassed by Xpeng in the third quarter of last year. In the fourth quarter, Nio's R&D expenses increased significantly and regained the highest position among these three companies.

Nio spent RMB 1.83 billion on R&D in the fourth quarter, compared to Xpeng's RMB 1.45 billion and Li Auto's RMB 1.23 billion.

In a conference call with analysts after announcing earnings on March 25, Beijing time, William Li, founder, chairman and CEO of Nio, said that Nio's investment in R&D has started to bear fruit in new products.

Nio's R&D investment in 2022 will more than double compared to 2021, and the R&D team will reach 9,000 people by the end of this year, Li said.

Nio will continue to increase R&D investment in key technologies in the coming years, especially in areas related to full-stack autonomous driving technology and power batteries, he said.

Xpeng's explanation for the increase in R&D expenses in the fourth quarter was:

The year-over-year and the quarter-over-quarter increases were mainly due to (i) the increase in employee compensation as a result of expanded research and development staff, and (ii) higher expenses relating to the development of new vehicles models to support future growth.

Li Auto's explanation was:

The increase in research and development expenses over the fourth quarter of 2020 and the third quarter of 2021 was primarily driven by increased employee compensation as a result of growing number of research and development staff as well as increased costs associated with new products developments.

In terms of net income, Nio and Xpeng continue to be in the red, while Li Auto is once again profitable.

Li Auto reported a net profit of RMB 296 million in the fourth quarter, the second time it has seen a net profit after the fourth quarter of 2020.

Nio reported a net loss of RMB 2.14 billion in the fourth quarter, up 54.4 percent year-on-year and 156.7 percent from the third quarter.

Xpeng reported a net loss of RMB 1.29 billion in the fourth quarter, an increase of 63.5 percent year-on-year and a decrease of 19.3 percent from the third quarter.

In terms of cash reserves, Nio has the most of these three companies.

As of the end of the fourth quarter, Nio's balance of cash and cash equivalents, restricted cash and short-term investments was RMB 55.4 billion, Li Auto was RMB 50.2 billion and Xpeng was RMB 43.5 billion.

NIO Q4 earnings call: Here's everything you need to know