Investment Rating - The report maintains an "Overweight" rating for the automotive industry [4][6]. Core Insights - The automotive industry is experiencing steady growth in consumer demand, supported by favorable policies. The retail sales of passenger cars in China for the first half of June 2025 reached approximately 706,000 units, representing a year-on-year increase of about 20% [16][38]. - The market share of new energy vehicles (NEVs) in May 2025 was approximately 48.7%, indicating a competitive pricing environment with reduced promotional discounts compared to earlier months [16][36]. - The report suggests focusing on companies that lead in smart technology and are aligned with the technological and model cycles, such as XPeng Motors, BYD, Xiaomi Group, and Leap Motor [4][16]. Summary by Sections Market Review - The automotive sector saw a 2.88% increase in the week from June 23 to June 27, 2025, ranking 19th among all primary industries [17][20]. - The automotive parts sector had the highest increase at 4.62%, while passenger vehicles had the smallest increase at 0.08% [20]. Industry Data Tracking - In May 2025, total automotive sales were approximately 2.686 million units, with a month-on-month increase of 3.7% and a year-on-year increase of 11.2% [24]. - The retail sales of passenger cars in May 2025 were about 2.352 million units, reflecting a year-on-year increase of 13.3% [25]. - The price of battery-grade lithium carbonate was approximately 61,150 CNY per ton as of June 27, 2025, showing a 1% increase from June 20, 2025 [40][42]. Industry Dynamics - Tesla launched its Robotaxi service in Austin, USA, and Xiaomi's YU7 car achieved a booking milestone of 289,000 units within one hour [3][45]. - The report highlights the strategic investments in autonomous driving technology by companies like Haibo and the collaboration with Ant Group and CATL [45]. Company Announcements - Asia-Pacific Holdings received a notice of being selected as a supplier for brake calipers and EPB projects [3][47]. - Xin Hongye's subsidiary received a bid notification for a project related to power cable procurement [47].