William Wilkes

Local Chinese EV makers BYD and Xiaomi are gaining share rapidly in China’s premium auto market at the expense of German brands. Xiaomi delivered more than 80,000 SU7 sedans in H1 2026, vastly outperforming Mercedes' new electric car. Chinese consumers see domestic vehicles as technologically superior with faster development cycles, driving a structural shift toward local brands.

Local Chinese EV makers BYD and Xiaomi are gaining share rapidly in China’s premium auto market at the expense of German brands. Xiaomi delivered more than 80,000 SU7 sedans in H1 2026, vastly outperforming Mercedes' new electric car. Chinese consumers see domestic vehicles as technologically superior with faster development cycles, driving a structural shift toward local brands.

Siemens raised its outlook and is seeing strong demand from data centers/automation. Conversely, Mercedes stock dropped ~4% on margin pressure, citing tariff uncertainty and fierce Chinese competition. This is a pair trade within the German economy. Siemens has successfully pivoted to industrial software (high margin, AI-linked), while automakers are trapped in a capital-intensive, low-margin war with China that they are losing. LONG the Industrial Software winner (Siemens); SHORT the Legacy Auto losers. A surprise removal of tariff threats or a sudden recovery in Chinese luxury auto demand.

Siemens raised its outlook and is seeing strong demand from data centers/automation. Conversely, Mercedes stock dropped ~4% on margin pressure, citing tariff uncertainty and fierce Chinese competition. This is a pair trade within the German economy. Siemens has successfully pivoted to industrial software (high margin, AI-linked), while automakers are trapped in a capital-intensive, low-margin war with China that they are losing. LONG the Industrial Software winner (Siemens); SHORT the Legacy Auto losers. A surprise removal of tariff threats or a sudden recovery in Chinese luxury auto demand.