XPeng Motors appears to be the latest Chinese automaker looking to bring local EV production to Europe. In a recent interview, XPeng founder, chairman and CEO He Xiaopeng revealed that the company is exploring potential locations in the EU to start local BEV production.
Now that the European Commission has imposed its first tariffs on Chinese-made EVs, we are starting to see some reactions from foreign automakers that show no signs of thwarting their global expansion plans.
For example, Chinese automakers such as BYD, Chery and ZEEKR are pushing to expand sales in Europe and starting local production, while NIO, one of the country's BEV leaders, is committed to entering new European markets despite the loss of profits due to tariffs, which currently stand at 36.3%.
XPeng Motors is currently subject to a 21.3% tariff on EV imports, but production remains in China. To mitigate the tariff hikes, XPeng is considering leveraging a recent partnership with the Volkswagen Group to expand vehicle production to a new site in Europe.
XPeng seeks 'low labor risks' for European production
In a recent interview with Bloomberg, XPeng founder He Xiaopeng revealed the Chinese automaker's plans to localize production in Europe. According to the interview, Xiaopeng said XPeng is already in the early stages of selecting a site within the EU and plans to choose a region with “relatively low labor risks.”
In addition to setting up new EV production facilities in Europe, Xpeng also plans to set up a large-scale data center in the region, as the company says efficient software collection has become essential for researching and improving intelligent driving functions for BEVs.
Echoing his company's competitors, Xiaopeng said the tariffs would not thwart Chinese automakers' global expansion plans, but he acknowledged that “profits from European countries will decline after the tariffs are raised.”
XPeng already has a foothold in several European markets, including Denmark, France, Norway, Sweden and Germany, and the automaker recently began testing XNGP ADAS in Germany ahead of a full European rollout.
Local production in Europe could help XPeng increase its presence in the region and finally achieve the profit margins it has been chasing for years.
Whether the EU likes it or not, Chinese automakers are coming in armed with the best EV technology, and while their dedication to their expansion goals is admirable, with 100% tariffs in the US and then Canada, don't expect to see these models in North America (at least north of Mexico) anytime soon.
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