Xiaomi delivers over 25,000 EVs in June amid strong YU7 demand

Xiaomi's EV division delivered over 25,000 vehicles in June, marking its ninth consecutive month above 20,000 units, slightly below May's tally. This strong performance is significantly boosted by the new YU7 SUV, which garnered nearly 289,000 pre-orders within an hour, intensifying competitive pressure on rivals like Tesla, whose China EV sales declined 15% year-over-year in May as Xiaomi and BYD gain market share. Xiaomi aims to deliver 350,000 EVs in 2025 and projects its auto division will achieve profitability in the second half of the year.

Analysis

Xiaomi's electric vehicle division maintained strong momentum, delivering over 25,000 units in June, extending its streak of monthly deliveries above the 20,000-unit threshold to nine consecutive months. While this figure represents a slight decrease from May's tally of over 28,000 vehicles, the underlying demand signal is exceptionally strong, driven by the overwhelming market reception for its new YU7 SUV, which secured nearly 289,000 pre-orders within its first hour. This successful launch significantly intensifies competitive pressure within China's EV market, directly challenging established players. Notably, Tesla's China-made EV sales contracted by 15% year-over-year in May, indicating a tangible shift in market share towards ascending competitors like Xiaomi and BYD. Looking ahead, Xiaomi has set an ambitious target of 350,000 EV deliveries for 2025 and anticipates its auto division will achieve profitability in the second half of that year, a goal underpinned by expanding production capacity from a new Beijing facility.

Key Decisions for Investors

• Investors should closely monitor Xiaomi's production ramp-up and delivery conversion rates for the YU7 SUV, as meeting the extraordinary pre-order demand is critical to achieving its 2025 profitability and delivery guidance.
• The 15% year-over-year decline in Tesla's May sales in China presents a significant headwind, warranting a re-evaluation of the risk of further market share erosion as local competitors gain traction with popular new models.
• The data suggests a clear divergence in performance, which may support a pairs trade strategy of being long on emergent Chinese EV players like Xiaomi and short on incumbents like Tesla that are showing signs of slowing growth in the region.