Xiaomi, Xpeng Earnings Clues: China EV Sector Amid Price War

Xiaomi and Xpeng's earnings reports are expected to provide insight into China's electric vehicle sector, which is undergoing a price war. Automakers will need to invest in new models and technological innovations to attract customers and offset rising research and development costs. Xiaomi's EV sales are estimated to have tripled in Q2, while Xpeng's R&D costs are seen up 42% in the quarter. Pop Mart International Group and Laopu Gold are expected to report strong earnings, driven by demand for Labubu dolls and fixed-priced gold jewelry.

The earnings reports from Xiaomi and Xpeng are expected to provide valuable insights into the rapidly evolving electric vehicle (EV) sector in China. Both companies are navigating a challenging landscape marked by a price war, rising research and development (R&D) costs, and intense competition. Investors and financial professionals are closely watching these reports to gauge the sector's health and the strategies automakers are employing to attract customers and remain competitive.

Xiaomi's EV sales are estimated to have tripled in Q2 2025, indicating a significant increase in consumer demand for the company's electric vehicles. This growth is a positive sign for the EV market, suggesting that consumers are becoming more accepting of electric vehicles despite the ongoing price war. Xiaomi's success in this segment may also be attributed to its strong brand presence and innovative product offerings [1].

On the other hand, Xpeng's R&D costs are seen to have increased by 42% in the quarter. This significant rise in R&D expenses underscores the intense pressure on automakers to invest heavily in new models and technological innovations to stay ahead of the competition. Xpeng's increased R&D spending is likely aimed at developing advanced features and improving the overall customer experience, which are crucial factors in the EV market [1].

The price war in China's EV sector is forcing automakers to adopt aggressive pricing strategies to attract customers. However, these strategies may not be sustainable in the long run, as they could lead to reduced profitability. The industry is hoping that hybrids and plug-in hybrids will bridge the EV adoption gap and rejuvenate internal combustion engine (ICE) models. Additionally, the focus on connected ownership experiences is expected to be a viable road for manufacturers to generate revenue and attract customers [1].

Pop Mart International Group and Laopu Gold are also expected to report strong earnings, driven by demand for Labubu dolls and fixed-priced gold jewelry. These companies are operating in different sectors but are also feeling the effects of the broader economic environment. Their strong earnings reports indicate that consumers are willing to spend on non-essential items, suggesting that the overall economic conditions may be improving.

In conclusion, Xiaomi and Xpeng's earnings reports will provide crucial insights into the current state of China's EV sector. The sector is undergoing significant changes, and automakers are adapting their strategies to navigate the challenges and capitalize on the opportunities. Investors and financial professionals should closely monitor these reports and the broader trends in the industry to make informed investment decisions.

References:
[1] https://wtop.com/news/2025/08/the-10-most-valuable-car-companies-in-the-world-5/