Chinese EV makers are being squeezed hard at home. XPeng (XPEV) posted strong Q2 revenue just under $3 billion, up 80% from Q1, but only 8% growth year over year. Revenue doubled from 2024 to 2025, now slowing to about 20%. This signals rising competition inside China. Chinese automakers need new ways to grow. Most are pushing low-cost EVs into the rest of the world. XPeng took another route and moved fast into robotics, with a new "Iron" division valued at $6 billion.
China is the world's largest auto market, almost twice the size of the US, yet competition there is so fierce that companies are going global quickly. US automakers should take note. They will need to go global faster and think much more about self-driving and robotics. Being only a car company is no longer enough.
The threat from Chinese automakers
The threat is real, but US rules should block most of the damage. Some Chinese-linked firms already make parts in the US. Volvo is owned by a Chinese company (Geely). Lincoln and Buick, for now, build some cars in China and ship them back, though that will change. US regulations will protect American buyers and the economy from the worst outcomes, and expect many partnerships to form.
Selling globally raises a harder question: how do these firms sell abroad when demand for electric cars at home in some markets is weak? Partnering with Chinese automakers looks like the path through.
EV slowdown in the US
The US has seen an EV slowdown after federal EV tax credits expired, though some states now offer their own incentives. Global adoption keeps rising while US demand dipped.
Are hybrids the winner, giving buyers both options? No. EVs are here to stay and the whole auto world is heading electric. Battery costs keep falling. When subsidies ended last year in Q3 and Q4, EV sales dropped, but they are now climbing again in both the US and the world. The reason is cost: more major automakers are bringing $25,000 and $30,000 EVs to market. At the Beijing, Shenzhen, and Shanghai auto shows, more Chinese vehicles offer 600-mile range at $29,000 to $30,000 per car with 7 to 10 minute charging. The old objections to EVs are fading fast.
The most valuable automakers
Look at the five most valuable auto companies in the world. Three are electric. Tesla (TSLA) is the clear number one. Toyota (TM) and Uber (UBER) are second and third; they still sell gas vehicles but lean more electric over time. Waymo (part of Alphabet, GOOGL) and BYD (BYDDY) are fourth and fifth.
Within three years, the top three most valuable automakers by market cap will all be electric, in this order: Tesla (TSLA), Waymo, and BYD (BYDDY). BYD has already announced it will sell more cars in 2030 than Toyota (TM). This is a major shift, and it is going fully electric, not hybrid, not internal combustion.
Robotaxis and self-driving
Self-driving and robotics clash with what many Americans want, which is to drive their own car. A point is coming where you cannot have both, though the timing is unclear. For rides today, many riders prefer the driverless option. People have grown so used to Uber (UBER) that the driver is often on the phone the whole trip and barely needs to be there. How self-driving will hit personal car sales is still unknown, because some buyers want it and some do not.
