Xpeng, the Chinese electric vehicle (EV) startup, is exploring options to localize production in Europe as a strategy to avoid impending tariffs on Chinese-built EVs. With plans for a significant global expansion in 2024, Xpeng is set to begin sales in nearly 40 new countries, including several in Europe, as well as markets in Southeast Asia and Australia.
The European Union is scheduled to vote on the implementation of new tariffs on Chinese EVs this week. If approved, Xpeng could face a substantial additional tariff of 21.3%, layered on top of the existing 10% duty it currently pays.
In an interview with Bloomberg, Xpeng’s vice chairman and co-president, Brian Gu, confirmed that the company is actively considering various production strategies for Europe, although these discussions are still in the early phases. “We’re looking at multiple options, ranging from contract manufacturing to collaborating with existing plants, or even establishing new facilities,” he stated.
Gu emphasized the importance of catering to the preferences of European customers, noting that features such as effective navigation tools are more sought after in Europe than the multimedia functions popular in China. “Being more local is not only because of the tariffs,” he explained. “As a company, we have to aspire to be a leader in a market like Europe. We need to think about becoming more local, with a local team to build a local brand and enhance our presence.”
While Xpeng is also eyeing opportunities in the U.S. market, Gu acknowledged the uncertainties surrounding entry into that market. “The U.S. market is very important and ripe for technological innovation,” he said, but highlighted that evolving policies present challenges for Chinese companies looking to enter.
