Xiaomi EV Sales Skyrocket 300% While Xpeng Slashes Costs Before Earnings Drop

China's EV wars heat up as Xiaomi's electric vehicle division reports staggering growth—meanwhile, Xpeng tightens its belt ahead of earnings season.

Xiaomi's EV arm triples sales: The smartphone-turned-automaker's aggressive pricing and tech integrations are stealing market share from legacy players. No official numbers yet, but insiders whisper 'hypergrowth.'

Xpeng's pre-earnings austerity: The rival automaker's cost-cutting spree suggests storm clouds on the horizon—because nothing says 'confidence' like slashing budgets before quarterly results. Analysts await the damage report.

Bonus finance jab: Meanwhile, traditional automakers are still trying to figure out why their stocks trade like boomer bonds.

TLDRs:

• Xiaomi’s Q2 EV sales more than tripled, boosting overall revenue growth despite reliance on smartphones and lifestyle products.
• Xpeng increased R&D spending by 42% while cutting per-vehicle costs through efficiency gains.
• China’s auto sector sees shift from price wars to technology and model innovation, tripling R&D since 2020.
• Geely’s stronger-than-expected results add optimism for upcoming Xiaomi and Xpeng earnings.

Chinese automakers Xiaomi and Xpeng are preparing to announce their latest earnings as the country’s electric vehicle (EV) sector undergoes a strategic shift.

Beijing’s recent push to end aggressive price cutting is reshaping industry priorities, driving a surge in research and development (R&D) spending and accelerating the launch of new models.

Xiaomi, which only entered the EV market in 2024, is emerging as one of the biggest winners from the sector’s pivot. Analysts estimate that the company’s Q2 EV sales more than tripled, powered by strong demand for its SU7 sedan. This surge helped lift overall quarterly revenue by about 30%, even as smartphones and lifestyle products continue to FORM the bulk of its business.

Geely’s Beat Sets a Positive Tone for Sector Peers

The upbeat mood in the market is partly due to Geely’s latest earnings, which exceeded analyst expectations.

This performance is being seen as an early indicator that Chinese EV makers may be entering a period of healthier margins and steadier growth.

Bloomberg Intelligence noted that automakers are less likely to offer DEEP discounts going forward, as the competitive edge shifts toward innovation. This is reflected in the sector’s R&D spend, which has tripled since 2020.

Xpeng Bets on Efficiency While Boosting Innovation

While Xiaomi rides a wave of sales growth, Xpeng is focusing on lowering production costs without slowing innovation.

The company’s R&D expenses are expected to be up 42% in the latest quarter, largely driven by its investment in autonomous driving technology and new model development.

Despite this spending, Xpeng has managed to reduce per-vehicle costs, signaling that its operational efficiency programs are beginning to pay off. Analysts believe these savings could help Xpeng remain competitive while avoiding the margin squeeze that often comes with rapid development cycles.

The New Competitive Weapon: Rapid Model Launches

One of the defining shifts in China’s EV race is the pace of product introductions. More than 50 new EV models are expected to debut in 2024, a stark departure from the traditional auto industry’s multi-year launch cycle.

Xiaomi’s SU7 sedan is a prime example of the strategy’s success, achieving over 75,000 deliveries in Q1 2025 after its 2024 debut.

However, industry experts warn that the costs of sustaining such a rapid release schedule could challenge profitability, especially in a still price-sensitive market.

That said, with earnings due in the coming days, all eyes are on Xiaomi’s ability to sustain its EV momentum and Xpeng’s success in balancing innovation with cost control. If both companies meet or beat expectations, it could mark a turning point for China’s EV sector, signaling a MOVE from bruising price competition to a more sustainable race for technological leadership.