Chagee Holdings' Q2 Earnings: A Tea House Giant Navigating China's EV Charging Boom

Chagee Holdings (NASDAQ: CHA) reported mixed results for Q2 2025, with revenue growth outpacing profit margins and unit economics showing signs of strain. While the company expanded its teahouse network by 40.9% year-over-year to 7,038 locations, net revenues rose only 10.2% to RMB3,331.9 million (US$465.1 million). Operating margins contracted sharply from 24.6% to 3.2%, and GAAP net income plummeted 87.7% to RMB77.2 million, driven by rising operating costs and share-based compensation expenses [3]. Same-store GMV growth in the Greater China market turned negative (-23.0%), signaling deteriorating unit economics [3].

Yet, the broader context of China’s electric vehicle (EV) charging infrastructure offers a compelling lens to assess Chagee’s long-term potential. By 2025, China accounts for 65% of global public EV charging points and 60% of the global light-duty EV stock [4]. The market is projected to grow at a 25.6% compound annual growth rate (CAGR) from 2025 to 2030, driven by fast chargers and government subsidies for ultra-fast charging hubs [5]. With 12.82 million charging points added by December 2024 and plans to expand further in 2025, the sector is poised for explosive growth [1].

Chagee’s recent leadership appointments—Emily Chang as Chief Commercial Officer and Aaron Harris as Chief Development Officer—signal a strategic pivot toward North American expansion [3]. While the company’s Q2 report does not detail EV charging infrastructure investments, its global supply chain expertise and cultural adaptation strategies mirror those of Chinese EV firms expanding internationally [2]. For instance, Chinese automakers like BYD and Nio have leveraged domestic manufacturing scale to dominate global markets, forming partnerships in regions like the Middle East and Southeast Asia [4]. Chagee’s ability to replicate this playbook in the EV charging sector could unlock new revenue streams, particularly as battery swap technology and ultrafast charging hubs gain traction [6].

However, risks persist. Chagee’s core business faces margin compression and declining same-store sales, which could divert resources from high-growth opportunities. The company’s lack of direct involvement in EV infrastructure—unlike competitors in the sector—raises questions about its capacity to capitalize on China’s EV boom. Investors must weigh whether Chagee’s recent leadership hires and global expansion plans are sufficient to pivot into a market where rivals like Tesla and ABB are already entrenched [3].

In conclusion, Chagee’s Q2 results highlight both resilience and vulnerability. While its teahouse network continues to grow, the company’s long-term prospects may hinge on its ability to diversify into China’s EV charging infrastructure—a sector with immense potential but fierce competition. For now, the absence of concrete EV-related investments in Q2 2025 leaves investors with a critical question: Will Chagee adapt its supply chain and operational expertise to ride the EV charging wave, or will it remain a tea house giant in a rapidly electrifying world?

Source:
[1] China expands EV charging infrastructure in 2024 [https://www.argusmedia.com/en/news-and-insights/latest-market-news/2650730-china-expands-ev-charging-infrastructure-in-2024]
[2] Chagee marches ahead in latest overseas push [https://www.chinadaily.com.cn/a/202505/01/WS6812e50fa310a04af22bd30c.html]
[3] Chagee Announces Second Quarter 2025 Unaudited Financial Results [https://www.stocktitan.net/news/CHA/chagee-announces-second-quarter-2025-unaudited-financial-nj07z6zyhhbg.html]
[4] Electric vehicle charging – Global EV Outlook 2025 [https://www.iea.org/reports/global-ev-outlook-2025/electric-vehicle-charging]
[5] China Electric Vehicle Charging Infrastructure Market Size [https://www.grandviewresearch.com/horizon/outlook/electric-vehicle-charging-infrastructure-market/china]
[6] A new fully charged EV battery in five minutes: Are China's swap stations the future? [https://www.bbc.com/future/article/20250506-are-chinas-swap-stations-the-future-of-electric-cars]