Contract builder Magna Steyr, which today still builds cars like the Mercedes G-Class, Toyota GR Supra, and BMW Z4 that share the same platform at its plant in Graz, Austria, is, according to a new report, closing a deal with Chinese Xpeng and GAC to build EVs for the European market.

It would work on semi-knocked-down kits (SKD) imported from China, which are partially assembled vehicles shipped to another location for final assembly to circumvent European import taxes in this case.

Blood transfusion

For Magna Steyr in Graz, which has a capacity of 150,000 cars a year, it would be a much-needed blood transfusion as production of the BMW 5 Series and the Jaguar E-Pace and I-Pace ended last year, and Z4 and Toyota GR Supra production will stop in 2026. Assembling the Ocean for American startup Fisker did not last long either.

Local media, such as Graz-based Kleine Zeitung, broke the news last week but added that the Chinese were to produce a small number of initial EV assemblies to test markets in Europe. It would be a limited number of GAC’s Aion Y and Xpeng’s G6. The negotiations could be finalized by June, but Magna Steyr hasn’t confirmed any rumors.

Present in 14 countries in Europe

As of March 2025, Xpeng operates in several European countries, including Germany, France, the United Kingdom, Norway, Denmark, Sweden, Finland, Iceland, the Netherlands, Belgium, Luxembourg, Spain, Portugal, and Ireland.

However, Xpeng sold 8,187 vehicles in Europe in 2024, a 304% increase from the previous year. Denmark is the company’s largest European market. The G6 is the fifth model in Xpeng’s range and the third offered in Europe, starting in May 2024.

The Chinese electric car manufacturer unveiled the five-seater a year ago, in April 2023, at Auto China in Shanghai. The coupé-like electric SUV is the first Xpeng model based on the new 800-volt SEPA 2.0 platform, which the company unveiled the day before.

Collaboration with Volkswagen

XPeng, headquartered in Guangzhou, was co-founded in August 2014 by Xia Heng (Henry Xia) and He Tao, former senior executives at GAC Group, a publicly traded company enlisted on the New York and Hong Kong Stock Exchange. It has a strategic collaboration with Volkswagen in China. The two manufacturers made deals in 2023 and have worked together since early 2024.

In July, they announced that Xpeng’s E/E Architecture (now called CEA, the ‘China Electronic Architecture’) would be integrated into VW electric cars based on the China Main Platform (CMP) in at least four models from 2026. VW will launch two electric mid-range models in 2026, developed jointly with Xpeng as part of that agreement.

Fifth-largest carmaker in China

Guangzhou Automobile Group Co., Ltd. (GAC Group) is a Chinese state-owned automobile manufacturer headquartered in Guangzhou. Founded in 1954, it is currently the fifth-largest automobile manufacturer in China and has strategic partnerships with Toyota and Honda.

In October 2024, GAC unveiled its ‘European Market Plan’ at the Paris Motor Show, marking its official foray into Europe. GAC introduced the Aion V, a compact electric SUV with a range of approximately 520 kilometers. This model should be available in select European markets in mid-2025, priced under €40,000.

The Aion Y Plus is one of the brand’s seven models available in China today, primarily in Asian markets like Thailand, Indonesia, and Malaysia. It is a compact crossover with 13 trims offered on the Chinese market, with a price range of 99,800 to 189,800 yuan (12,710 to 24,170 euros).