By Jiahui Huang

Chinese automakers' June sales point to slowing demand for electric vehicles in China, as regulators move to rein in aggressive pricing that has sparked industry price wars.

The roundup of last month's sales also reflected the seasonal slowdown typically seen at midyear.

EV shares were mixed in Hong Kong on Wednesday following the results. Decliners were led by Li Auto, whose stock fell 2.4% after the company reported a 24% drop in sales.

While the hybrid-vehicle specialist's second-quarter deliveries beat its lowered guidance of 108,000 units, they were well short of initial projections.

BYD, the country's largest EV maker, reported a 12% rise in sales of new energy vehicle sales in June, a deceleration from the pace seen over the previous three months. Shares of the Tesla rival were up just 0.1% at midday.

Nomura analysts said BYD faces challenges in reaching its full-year sales target of 5.5 million units. Still, they believe the company will eventually see a sales rebound.

Guangzhou-based XPeng was the one of the few outperformers, more than doubling deliveries in June and continuing a strong showing so far this year. First-half 2025 deliveries have now surpassed the total recorded in 2024.

XPeng's shares were up 2.4% in Hong Kong by midday.

U.S.-listed NIO sales was largely in line with market expectations, with deliveries rising 18% in June from May. Second-quarter deliveries also met guidance.

Particular focus was on newcomer Xiaomi, whose launch of a new sport utility vehicle last month drew strong demand. Xiaomi said on its Weibo account that it delivered more than 25,000 units in June, down from over 28,000 in May.

Given that the YU7 attracted record-high bookings, however, the only bottleneck for Xiaomi appears to be production capacity, Nomura analysts said,

Carmakers in China are under pressure from authorities, who have repeatedly warned the industry against competing through "toxic" price cuts.

That has dampened market sentiment toward the auto sector, with analysts questioning how demand will hold up without aggressive price cuts--a long-standing weapon of choice for carmakers battling fierce competition.

Adding to the policy headwinds is heightened scrutiny of autonomous driving technology, another tool carmakers have used to win over China's cautious consumers.

With inventory piling up and companies aiming to hit ambitious sales targets, competition could intensify in the second half, Nomura said.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

July 02, 2025 02:22 ET (06:22 GMT)

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