This Chinese Tesla Rival Just Recorded Its First Ever Profit From EV Sales
News Summary
Chinese tech giant Xiaomi Corp's EV arm reported its first-ever profit in Q3 2025, reaching RMB 700 million (approximately $98.4 million). The company's overall profits surged 80.9% to RMB 11.3 billion (approximately $1.5 billion). Xiaomi's EV deliveries in Q3 surpassed 100,000 units, reaching 108,796 deliveries, with cumulative deliveries for the first three quarters exceeding 260,000 vehicles. The company also opened 402 smart EV sales centers across 119 cities in the Chinese Mainland. This growth coincides with Tesla Inc.'s declining sales in the Chinese market, which fell 36% year-over-year in October to 26,000 units sold in the country. Tesla's Shanghai Gigafactory sold over 61,497 units of Model Y and Model 3, including exports, in October, a 9.9% decline from last year. Xpeng Inc. announced during its third-quarter earnings call that it would release three Robotaxi models next year, emphasizing its technology's independence from LiDAR, and plans to begin pilot Robotaxi operations in China next year.
Background
Xiaomi Corp is a leading Chinese consumer electronics and smart manufacturing company that has aggressively expanded into the electric vehicle market, with its first model, the SU7, launched in 2024 and quickly gaining market attention. The Chinese new energy vehicle market is highly competitive, with both domestic and international brands vying for market share. Tesla, a global EV giant, once dominated the Chinese market but has faced increasing competition from local brands such as Nio, Xpeng, Li Auto, and now Xiaomi. Price wars and accelerated product iteration have become the norm in the industry. Xpeng Motors is one of China's leading new energy vehicle manufacturers, known for its investment in smart driving technology. Autonomous driving technology, particularly the use of LiDAR, has been a contentious topic within the industry, with Tesla CEO Elon Musk previously expressing skepticism about it.
In-Depth AI Insights
What are the deeper implications of Xiaomi EV's rapid profitability for the competitive landscape of China's EV market? - Xiaomi, leveraging its strong brand recognition, extensive retail network, and cost control advantages from consumer electronics, has quickly replicated its success model in the smartphone market. This indicates that China's EV market is shifting from early technology-driven competition to a more 'hardcore' competition focused on scale, cost efficiency, and user ecosystems. - This profitability not only validates Xiaomi EV's initial market strategy but may also prompt other tech giants entering the EV space to accelerate their commercialization efforts or re-evaluate their competitive strategies against 'disruptors' like Xiaomi. Traditional automakers will face greater pressure for consolidation and efficiency improvements. Does Tesla's sustained decline in China's market share signal the necessity for a global strategic recalibration, especially amidst evolving US-China trade policies under the Trump administration? - Tesla's challenges in the Chinese market extend beyond local competition, potentially being indirectly influenced by US-China geopolitical tensions. This might compel Tesla to consider deeper supply chain diversification and regionalized production strategies. The Trump administration's trade policies could intensify this pressure, making localization even more critical. - China, as the world's largest EV market, poses a structural challenge to Tesla's long-term growth prospects due to the rise of local brands. Tesla may need to adopt more aggressive localization strategies in China, including deeper integration with Chinese supply chains and innovations in products and services that better cater to Chinese consumer preferences, rather than solely relying on brand and technological superiority. What are the strategic intentions and potential risks behind Xpeng's increased investment in Robotaxi and non-LiDAR autonomous driving technology? - Strategic Intentions: Xpeng aims to reduce costs and technical complexity through a differentiated technological path (non-LiDAR) while capturing the high-value segment of future mobility services. The Robotaxi deployment signifies its ambition to transition from a pure car seller to a mobility service provider, aiming for greater market share and profits when autonomous driving technology matures. - Potential Risks: While the non-LiDAR route may reduce costs, its safety and reliability in complex environments still require market validation, which could affect the speed of Robotaxi service rollout and user trust. Furthermore, the regulatory environment and business models for Robotaxi services are still in early exploratory stages globally, presenting high uncertainty and policy risks.