Li Auto and XPeng Lead a Pivotal EV Tech Week

China’s EV sector delivered a striking mix of market stress and technology momentum this week. On May 18, auto stocks in both Hong Kong and mainland China sold off sharply, with Li Auto plunging more than 14% in Hong Kong trading, even as the company began deliveries of its new L9 Livis flagship SUV. At the same time, XPeng rolled its first mass-produced Robotaxi off the line and signaled a faster push into autonomous driving and Southeast Asia expansion. Together, these developments capture the current reality of the Chinese EV market: short-term investor anxiety, but relentless long-term competition in software, chips, batteries, and global scale.

Auto Stocks Slump as Sentiment Turns Risk-Off

The most immediate headline was the broad-based weakness across Chinese auto names on May 18.

In Hong Kong:

• Li Auto-W fell more than 14% at one point
• Leapmotor dropped more than 7%
• Great Wall Motor fell nearly 4%
• NIO-SW lost more than 3%
• Geely, BYD, and XPeng also declined
• The Hang Seng Index closed down 1.11%
• The Hang Seng Tech Index fell 1.95%
• Southbound capital recorded a net sell of HK$7.9 billion

In A-shares:

• The Shanghai Composite slipped 0.09%
• The Shenzhen Component Index fell 0.2%
• The passenger vehicle sector dropped 2.27%
• The commercial vehicle sector fell 2.52%
• BYD closed at RMB 94.51, down 1.86%
• Among 140 tracked auto stocks last week, 102 declined, with an average drop of 3.26%

Why the sector fell

According to market commentary cited by D1EV, the sell-off was not caused by a single event but by three overlapping pressures:

1. Export optimism faded
   Investors had priced in possible trade or tariff benefits from high-level political developments, but no meaningful policy relief materialized.

2. Weak domestic sales data
   China passenger-car retail sales in April were only 1.384 million units, down 21.5% year on year and 16% month on month. New-energy retail sales in the first quarter were said to be down 20.9% year on year, while aggressive discounting continued to pressure margins.

3. Tariff barriers remain severe
   The report noted EU anti-subsidy tariffs on Chinese EVs as high as 45.3%, while the US tariff on Chinese EVs remains 100%, sharply limiting direct exports to Western markets.

This backdrop helps explain why even technically ambitious carmakers are struggling to hold valuations. Investors are increasingly demanding proof of sustainable profitability, not just product launches.

Li Auto’s L9 Livis Shows the New Battlefront: Full-Stack Control

Ironically, Li Auto’s share-price weakness came just as it was showcasing one of the most technically important launches in its history. The new Li L9 Livis, priced at RMB 509,800, represents a major shift from systems integration toward a more vertically integrated, self-developed architecture.

Li Auto says the L9 Livis is its first flagship SUV to combine:

• A self-developed Mach M100 intelligent-driving chip
• A new 800V active suspension system
• A more advanced by-wire chassis architecture
• A high-capacity 72.7 kWh 5C battery
• A next-generation 1.5T range extender

Key Li L9 Livis specifications

Why the L9 Livis matters

The L9 Livis is significant for more than its specs sheet. It shows how Chinese premium EV makers are moving deeper into full-stack development, especially in four areas:

• Smart driving silicon: Li Auto’s dual 5nm Mach M100 chips deliver 2,560 TOPS combined.
• Chassis electronics: steer-by-wire, EMB braking, and rear-wheel steering point to higher software-defined vehicle control.
• Energy system efficiency: the 72.7 kWh battery and 5C charging reduce one of the traditional pain points of range-extended vehicles.
• Cabin computing: Qualcomm’s Snapdragon 8797 Elite underpins a high-end, screen-heavy interior architecture.

The broader competitive implication is clear: Chinese automakers are no longer competing only on price or battery size. They are increasingly competing on chip architecture, vehicle operating systems, high-voltage platforms, and AI models.

XPeng Pushes Robotaxi Into Mass Production

While Li Auto highlighted vertical integration in premium family SUVs, XPeng made perhaps the week’s most future-facing announcement: its first mass-produced Robotaxi has officially rolled off the line.

XPeng says the vehicle, based on the XPeng GX platform, is China’s first fully self-developed, factory-installed mass-production Robotaxi. The company plans to begin demonstration operations in Guangzhou in the coming months, launch pilot Robotaxi operations in the second half of this year, and target fully autonomous operations without on-site safety staff by early 2027.

XPeng Robotaxi highlights

• L4 autonomous driving target
• Pure vision perception approach
• 4 self-developed Turing AI chips
• Total onboard compute power of 3,000 TOPS
• Equipped with XPeng’s second-generation VLA model
• Demonstration operations to begin in Guangzhou

This is one of the clearest signs yet that Chinese EV players see autonomous mobility not as a side project, but as a future revenue platform.

Musk’s 90% AI-Driving Prediction Adds Context

XPeng’s Robotaxi update landed alongside another high-profile autonomous-driving statement. Speaking by video link at a smart mobility summit in Tel Aviv on May 18, Elon Musk said he expects autonomous vehicles to become much more widely deployed in the US later this year. He also predicted that in 10 years, 90% of miles traveled could be driven by AI, making human driving a niche activity.

That forecast is, of course, highly ambitious. But in the context of China’s market, it matters because companies such as XPeng, Huawei-backed brands, and increasingly Li Auto are all investing heavily in AI-driven mobility stacks. The competitive race is no longer limited to EV drivetrains; it now includes:

• Perception and sensor fusion
• End-to-end driving models
• In-car AI compute
• Fleet operations for Robotaxi services
• Regulatory readiness for L3/L4 deployment

XPeng’s Indonesia Move Signals a New Phase of Overseas Expansion

XPeng’s week was not just about autonomy. Market reports also indicated that the company acquired 90.1% of Indonesian EV manufacturer ERA Industri, giving XPeng effective control over local assembly and manufacturing operations.

According to the source material:

• The equity transfer was completed on May 13
• XPeng took over 154,072 shares, equal to 90.1% ownership
• Local partner ERAL reduced its stake from 99.99% to 9.9%
• Distribution, sales, and after-sales remain with ERAL subsidiaries

This matters because Chinese EV makers are increasingly responding to trade friction by building localized production footprints in friendlier overseas markets, especially in Southeast Asia.

Other Signals From China’s EV Market

Several additional developments rounded out the week and reinforced how broad the competition has become.

Xiaomi prepares a new battery supply chain strategy

Reports suggest Xiaomi Auto has added CALB as a battery supplier for its Kunlun model line, alongside Sunwoda. The supply split is reportedly:

• Sunwoda: 60%
• CALB: 40%

The same report said Xiaomi may spin the Kunlun line into an independent sub-brand called SKYNOMAD, focused on family-oriented range-extended SUVs, creating clearer separation from Xiaomi’s core EV brand positioning around pure electric, tech-centric, performance models.

Xiaomi YU7 GT is about to launch

Xiaomi also confirmed that the YU7 GT will launch on May 21. The high-performance SUV features:

• Dual-motor AWD
• Up to 1,003 hp
• Top speed of 300 km/h
• 705 km CLTC range

Huawei-backed premium segment keeps expanding

Huawei executive Richard Yu previewed the ultra-luxury Zunjie S800 Grand Design, due in June, with both BEV and EREV variants and an expected price of around RMB 2 million. He also teased the extended Aito M9 Ultimate long-wheelbase version, featuring a 2.0T range extender, tri-motor setup, and a body measuring 5,402 mm in length.

NIO and premium MPV momentum

• NIO is set to deliver the 110,000th unit of the new ES8 this week.
• The Luxeed V9 reportedly secured more than 10,500 firm orders in 48 hours.

These numbers suggest that demand in premium NEV segments remains resilient, even if the public-market mood is far less forgiving.

Comparison Table: The Week’s Key Product and Strategy Moves

Why This Matters Globally

For international readers, this week’s developments are a reminder that the Chinese EV industry is evolving on two tracks at once.

On one track, the sector faces real pressure:

• weak near-term sales data
• margin compression from discounting
• high tariff barriers in Europe and the US
• volatile equity-market sentiment

On the other track, the technology race is accelerating:

• more self-developed chips
• faster charging architectures
• by-wire chassis systems
• AI-powered driving stacks
• localized manufacturing outside China

That combination is important because it suggests Chinese automakers are not retreating in the face of market pressure. Instead, many are doubling down on the technologies and international structures they believe will define the next phase of competition.

The Road Ahead

The immediate challenge for Chinese EV makers is restoring investor confidence in growth quality, not just growth volume. That means proving they can defend margins, navigate export barriers, and scale costly bets in autonomous driving without eroding balance sheets.

But the product and technology announcements from Li Auto, XPeng, Xiaomi, NIO, and Huawei-backed brands show that innovation has not slowed. If anything, the market downturn is sharpening the divide between companies with credible full-stack capabilities and those still relying on commodity hardware and price cuts.

In that sense, this week may be remembered less for a one-day stock slump and more for what it revealed about the next chapter of China’s EV industry: a battle increasingly defined by AI, vertical integration, premiumization, and overseas localization.