XPeng wants to produce in Europe and tightens links with VW

Xpeng is looking for a European production site because of the additional EU tariffs on imported electric cars from China. In addition, the Chinese start-up is intensifying its ongoing cooperation with Volkswagen.

Xpeng’s CEO, He Xiaopeng, told Bloomberg that the company is initially selecting a production site in the EU and planning to set up a large data center in Europe. While it is unclear where the company is looking to set up shop, He Xiaopeng stated that it is looking at areas featuring “relatively low labor risks”.

Important Data Center

One of the central undertakings will be the data center “as efficient software collection becomes paramount for cars’ intelligent driving features”. According to the Bloomberg report, “Xpeng also sees its expertise in artificial intelligence and advanced assisted driving features as helping it make inroads into Europe.”

“Selling a million AI-powered cars per year will be a prerequisite for the companies that finally emerge as the winners in the next ten years, in which the human driver may touch the steering wheel less than once per day on average on its daily commute,” He Xiaopeng commented.

“We will see companies rolling out such products from 2025, and Xpeng will be among them.” Last month, Xpeng announced plans for an autonomous taxi to launch in 2026.

Avoiding EU surtaxes

Xpeng is undoubtedly not the first Chinese automobile manufacturer looking to establish a manufacturing footprint in Europe. BYD and Chery, for example, already have factories on the old continent. They hope this will minimize the effects of the increased import tariffs on Chinese manufacturers.

Other manufacturers, such as SAIC’s MG Motor, are looking to find other loopholes. In MG’s case, exporting its vehicles from a factory in Thailand would face different tariffs, but the project still has to be studied, and the Thai government has to negotiate a free-trade agreement with Europe first.

Volkswagen link

The ongoing production agreement with Volkswagen will likely also help its European production. The two companies have extended their technical cooperation agreement to the E/E architecture, meaning they could use the same suppliers.

Both companies are making significant efforts to have their engineers learn from each other. In an interview with CNBC, Xpeng’s co-president Brian Gu said that hundreds of Volkswagen staff are spending time at Xpeng as the companies work to create electric cars for the Chinese market.

While VW did not comment on the interview, Gu stated that the German engineers were spending much time at the Chinese start-up’s offices.