As short-term tariffs imposed by the EU on Chinese language electric vehicles (EVs) took effect in July, we noted that Xpeng was considering setting up a manufacturing facility in Europe to circumvent the restrictions. It appears that the project has progressed an extra phase unexpectedly. Xpeng’s Chairman He Xiaopeng recently disclosed that the company is set to expand its electric vehicle (EV) sales into Europe, aiming to mitigate the impact of tariffs on its business. The selection process for the location remains in its preliminary stages.
XPeng was among several companies that collaborated with the European Commission’s inquiry into alleged subsidies received by Chinese electric vehicle manufacturers. Notwithstanding, this particular corporation was not among those individually selected, leaving it subject to the 20.8% tariff at present. Corporations like Xpeng, along with several others, will face a potentially revised 21.3% tariff rate, pending adjustments before the November deadline for final implementation.
Xpeng began exporting vehicles to Europe in 2020, initially targeting Norway before expanding its presence in the region. During its most recent earnings call, Xpeng announced a significant milestone: rapid global sales growth, which served as a key catalyst for both revenue and sales expansion. For the first time in the second quarter, international sales contributions surpassed 10% of total revenue. Xpeng’s flagship SUV, the G9, dominated sales charts as the leading mid-to-large pure electric SUV in Norway and Denmark, while also securing a top-three spot in Sweden and the Netherlands. The corporation has successfully expanded its presence to over 30 countries and regions worldwide, including major markets in Europe, the Middle East, and Latin America.
Chinese electric vehicle maker Xpeng is following a growing trend among its peers in exploring opportunities to set up manufacturing facilities within European Union member states, largely driven by the impact of EU tariffs. Stelantis-backed startup Leapmotor has already launched production operations in Poland, while Chinese automaker BYD is building a new manufacturing facility in Hungary. The state-owned automaker SAIC is expected to make an official announcement in September regarding the potential location of its new plant, which will produce MG-branded vehicles.
The European Union’s ultimate tariffs on imported electric vehicles will see Tesla subjected to a 9% levy, BYD facing a 17% tariff, Geely hit with a 19.3% duty, and cooperating manufacturers that have not been individually sampled imposing a 21.3% charge. Meanwhile, SAIC and non-cooperating producers will face a 36.3% tariff on their imports.
Supply: Quick Expertise
