Chinese EV makers Leapmotor and Xpeng posted record sales in July 2025 amid rising demand for lower-priced EVs.

Leapmotor, backed by Stellantis, delivered 50,129 vehicles, its third straight monthly sales record and a 127% year-on-year increase.

Xpeng, partly owned by Volkswagen, delivered 36,717 cars, up 229% from a year ago and surpassing its previous record.

Both companies target the budget segment, offering EVs around 100,000 yuan (US$13,888), attracting cost-conscious buyers.

Carmakers have cut discounts and incentives after Beijing pushed to end a price war.

Xiaomi also reported July deliveries exceeding 30,000 units, though it gave no exact number.

Meanwhile, China’s EV market saw record pre-orders despite upcoming changes to tax incentives.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s sophisticated approach combines market stimulation with strategic restraint

Beijing’s recent intervention to end the EV price war demonstrates how the Chinese government actively manages market dynamics beyond just providing subsidies.

After pumping approximately $230.9 billion into the EV sector from 2009 to 2023, Chinese authorities recognized that excessive price competition could undermine the industry’s long-term health 1.

The May directive warning manufacturers against aggressive price cuts represents a shift from pure growth stimulation to market stabilization, showing how China balances rapid adoption with sustainable industry development.

This approach includes policies like free license plates for EV buyers, which significantly impacts consumer purchasing decisions by removing bureaucratic barriers 2.

The strategy has proven effective, with China’s EV sales surging from 1.3 million units in 2021 to 6.8 million in 2022, accounting for over a third of global sales 2.

2️⃣ The budget EV segment reveals China’s global competitive strategy

The success of EVs priced around $13,888 signals how Chinese manufacturers are using affordability as a tool for both domestic and international expansion.

This pricing strategy builds on China’s experience with even cheaper mini-EVs priced around $6,250, demonstrating the country’s ability to serve different market segments simultaneously 3.

The approach is already paying dividends internationally, with Chinese car brands doubling their European market share to 5.1% in the first half of 2025, largely driven by competitive pricing 4.

Companies like Xpeng have positioned their Mona 03 sedan at 119,800 yuan—half the price of Tesla’s Model 3 at 263,500 yuan—while offering similar self-driving capabilities.

This pricing power stems from China’s massive scale advantages and government support, creating a formidable challenge for traditional automakers who must compete on both technology and cost in an increasingly price-sensitive global market.

Recent Leapmotor developments