Xpeng aims to assemble EVs in Europe to blunt impact of import tariffs, CEO says

Xpeng is looking for a manufacturing site in Europe, making it the latest Chinese electric-vehicle maker seeking to mitigate the impact of import tariffs by building its cars in the region.

Volkswagen’s Chinese partner is in the initial stages of selecting a site in the European Union as part of its future plan to localise production, Chief Executive Officer He Xiaopeng said in an interview with Bloomberg in its headquarters in Guangzhou, China, on Thursday.

The company expects to build capacity in areas with “relatively low labour risks,” He said, adding that Xpeng also plans to set up a large-scale data centre in Europe as efficient software collection becomes paramount for cars’ intelligent driving features.

Xpeng’s broad plan of going global isn’t going to be impacted by higher levies, He maintained, although he noted that some “profits from European countries will be reduced after the tariff increase.”

Establishing a manufacturing footprint in Europe would see Xpeng join the growing ranks of Chinese EV makers, including BYD, Chery Automobile and Zhejiang Geely Holding Group’s Zeekr, looking to build out production in the region to minimise the impact of the European Union’s decision to increase duties on China-made EVs to as much as 36.3 per cent. Xpeng is set to face an additional tariff of 21.3 per cent.

Added European levies are just one aspect of a wider global trade dispute. The US has imposed tariffs on Chinese EV imports that can top 100 per cent, as the world’s two biggest economies spar over an industry that is grown rapidly thanks partly to Beijing’s subsidies.