Contract manufacturer Magna Steyr is reportedly close to securing agreements to assemble electric vehicles for China’s Xpeng and GAC at its plant in Graz, Austria, potentially starting in June, according to German newspaper Kleine Zeitung.
The move would allow the Chinese automakers to circumvent the European Union’s new tariffs on Chinese-built electric vehicles. Xpeng faces a 21.3% additional tariff on top of the standard 10% import duty, which could be avoided through a semi-knocked-down (SKD) assembly process in Austria.
Under this method, vehicles are partially assembled in China, shipped as components, and reassembled in Europe, resulting in lower customs duties.
Magna Steyr has not confirmed the negotiations, stating it does not comment on “ongoing negotiations nor other details.” While the specific models have not been disclosed, Xpeng’s G6 and G9 SUVs, as well as its P7 sedan, are already available in Europe, whereas GAC’s Aion V has yet to launch in the region.
See also: Xpeng Expands into Switzerland, Czech Republic, and Slovakia as European Growth Continues
The Austrian plant has seen declining production, with only 71,900 vehicles built last year, down from 105,000 in 2023. Jaguar ended production of the I-Pace, while contracts with BMW and Toyota are set to expire in 2026.
Meanwhile, Fisker, which had planned to produce its Ocean SUV at the facility, has filed for bankruptcy. The potential deals with Xpeng and GAC could provide a much-needed boost to Magna Steyr’s operations.
