XPeng CEO says carmaker is studying European production sites

Chinese electric carmaker XPeng is considering production options in Europe, including underused factories in Germany, as it plans a wider European expansion, chief executive He Xiaopeng said in Munich.

He told reporters that many European countries could potentially host factories, but said many of the options were still in Germany. He stressed that talks about possible new collaborations in Europe were at an early stage.

German carmakers are looking for ways to use spare factory capacity as they face pressure from US tariffs, lower margins on electric cars and competition from Chinese manufacturers. Volkswagen chief executive Oliver Blume told staff on Monday that four German factories might need to close as the company considers large job cuts. In April, Blume raised the possibility that European Volkswagen plants could build cars for the company’s Chinese partners.

Volkswagen holds a 4.99% stake in XPeng and works with the company in China to develop vehicles for the Chinese market. XPeng already has an agreement with Austrian contract manufacturer Magna Steyr to make cars in Europe.

Producing vehicles in Europe could help Chinese carmakers reduce the effect of European Union tariffs on their electric cars. It could also help them address political concerns in Europe about growing Chinese competition in higher-technology manufacturing.

Automotive intelligence firm Dataforce said Chinese brands including BYD, Geely and Chery had nearly 11% of the European car market in May, compared with just under 3% years earlier. XPeng nearly doubled its vehicle deliveries in Europe to 31,000 in the first half of the year and almost tripled deliveries in Germany.

He said XPeng wanted to invest in Europe and was willing to work with several companies, including Volkswagen. He said he hoped the company would eventually have multiple European factories and research and development opportunities covering cars, robots and other work.