Chinese electric vehicle sales are turning a corner from their usual, early-year down periods, as top manufacturers XiaomiXIACY and XPengXPEV prepare for major investor updates on their models competing with TeslaTSLA.
On Thursday, Xiaomi will release the updated version of its SU7 sedan, a chief rival of Tesla‘sTSLA Model 3. A day later, XPeng will report earnings that could offer updates on its robotaxi-specific model.
On Wednesday, shares of XPeng fell about 1.5%, slipping to a loss of more than 4% so far for the week. Xiaomi stock fell over 1%, leaving shares up more than 3% for the week. Meanwhile, Tesla stock was down a bit Wednesday but up slightly for the week.
China EV Sales
The news from Xiaomi and XPeng arrives as Chinese EV makers struggle with domestic sales, which have pushed them to expand into overseas markets where Tesla already has a foothold. Last month, sales of EVs in China dropped 32% vs. a year earlier.
However, the typical sales slump that accompanies January and February is «largely behind us,» HSBC China auto analyst Yuqian Ding wrote in an analyst note on Wednesday.
In addition to the industry’s seasonal trends, Ding also cited a renewed focus on releasing updated models from EV makers.
«Competition is moving beyond price cuts and is more on new launches, feature upgrades and mix uplifts,» she wrote.
Xiaomi SU7 vs. Tesla Model 3
For example, Xiaomi’s SU7 is set to include a V6 engine, a charging range of 560 miles, with a fast-charging feature that can add about 415 miles of range in 10 minutes of charging and the company’s latest self-driving tech. The SU7 is set to retail at a starting price of roughly $33,000.
The new release could further widen the gap with Tesla’s Model 3, which has a top range of 363 miles and can add about 200 miles in 15 minutes at Supercharger stations. The starting price for a Model 3 is about $37,000.
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That said, Tesla outsells Xiaomi in China. Last month, Tesla sold 38,206 cars in China compared to Xiaomi’s 20,196 units, according to CnEVPost. Xiaomi cars aren’t available in the U.S.
New Chinese EV Models
Other Chinese EV companies are also slated to release new cars this year.
BYDBYDDF has at least six new releases and model updates scheduled for the first half of the year, including the Denza Z9GT, Tai3/Tai7 SUV, Datang SUV, the Song Ultra EV and Sealion 06 EV. Leapmotor has two full-size SUVs — the D19 and D99 models — on the books for a second quarter release. NioNIO also has two SUV models: the five-seater L80 and the larger ES9.
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Meanwhile, XPeng has its own premium SUV in the works, as well as a robotaxi model, meant to accelerate its push into autonomous vehicles. Initial road tests for XPeng’s robotaxis began earlier this year, according to the company. Tesla has yet to launch its robotaxi service in China.
XPeng Earnings
«XPeng is seeing improving fundamentals, combined with optionality from its robotaxi and robotics narratives that attract growth (and) tech flows,» Ding wrote.
Analysts expect robust growth heading into XPeng’s upcoming earnings.
Quarterly revenue is slated to grow about 40% year over year to $3.12 billion, according to FactSet. The company is expected to remain unprofitable, but get the closest it has ever been to breaking even, with a net loss of $2.9 million.
As a result, earnings per share are forecast to be $0.00 per share, an improvement from the 19-cent loss in the fourth quarter of 2024.
XPeng’s U.S. shares have an «overweight» rating with a mean price target of $24.77, which implies 31% growth, according to analysts polled by FactSet.
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