China Auto Roundup: Tesla Renews Bid to Break Into China’s Insurance Market, Li Auto Retakes EV Sales Crown From Huawei

Auto Roundup provided the latest insights into China’s automotive industry, covering key trends and events concerning electric vehicles (EVs), gas-powered cars, and related technologies. Notably, Tesla, Li Auto, XPeng, Evergrande NEV, and major global automakers like BMW and Volkswagen had significant updates. The Chinese government also introduced notable policies regarding truck emissions and subsidies.

Tesla is making another attempt to establish itself in China’s insurance market by registering an insurance broking firm in Beijing. Tom Zhu, Tesla’s senior vice president of automotive, has been named chairman. However, the company requires approval from China's National Financial Regulatory Administration before it can operate. This is Tesla's second effort at launching an insurance broking business in China; the first one, set up in Shanghai in 2020, was closed in April 2023 [para. 2][para. 3][para. 4][para. 5].

Li Auto reclaimed the top spot in EV deliveries among emerging Chinese EV manufacturers for the third consecutive month, surpassing Huawei. Li Auto delivered 47,774 EVs in June and 51,000 in July, which marked a 49.4% year-on-year increase and set a new monthly delivery record. Huawei's EV ventures, including Aito with Seres Group and Luxeed with Chery Automobile, reported combined deliveries of 46,141 in June and 44,090 in July [para. 6][para. 7][para. 8].

XPeng Aeroht, the flying car subsidiary of XPeng Inc., acquired $150 million in a fresh funding round with a post-investment valuation surpassing $1 billion. The Guangzhou government coordinated this funding round, involving three state-owned companies. Guangzhou GET Investment Holdings Co. Ltd. made the largest investment of $70 million, while two other government-backed firms invested $50 million and $30 million respectively [para. 10][para. 11][para. 12].

A court mandated a bankruptcy reorganization for two subsidiaries of Evergrande New Energy Vehicle Group Ltd. in response to creditors' petitions. This judgment followed a Friday hearing concerning the bankruptcy of Evergrande New Energy Vehicle (Guangdong) Co. Ltd. and Evergrande Smart Automotive (Guangdong) Co. Ltd. The parent company’s shares closed down by 7.9% on Monday [para. 14][para. 15][para. 16].

Falling demand in China severely affected global automakers like BMW and Volkswagen, capping off a challenging earnings period. Both companies reported declining second-quarter earnings, struggling with lower EV sales and weak consumer spending due to a deepening home sales crisis in China. This slowdown, paired with persistent inflation and lackluster EV sales in Europe, is undermining strategies to retool factories and develop new electric models. Mercedes-Benz Group AG, Stellantis NV, Nissan Motor Co. Ltd., and Ford Motor Co. also experienced earnings falling short of expectations [para. 18][para. 19][para. 20].

In efforts to reduce air pollution, China is offering financial subsidies up to 140,000 yuan ($19,340) to replace old diesel-powered trucks, which contribute significantly to energy consumption and pollution due to outdated technology. This policy aims to promote trucks adhering to the latest emission standards or powered by new energy sources [para. 22][para. 23].