Chinese electric vehicle maker Xpeng has officially begun local production in Europe, a move aimed at expanding its market share while reducing the impact of steep tariffs on imported EVs.
The company announced that its first European localized production project has started at the Magna plant in Graz, Austria. The first Xpeng G6 and G9 SUVs have already rolled off the assembly line, marking the beginning of what Xpeng describes as a long term commitment to the European market.
In the future, the Graz facility will also produce a wider range of Xpeng models, including pure electric sedans, midsize and compact SUVs, and hybrid vehicles. This expansion will allow the automaker to build a more diverse product portfolio tailored to European customers.
Xpeng is leveraging the proven manufacturing capabilities of Magna Steyr, a contract manufacturing subsidiary of Canada based Magna. Rather than building a new factory, the company is making use of Magna’s existing facilities and production lines. Magna Steyr operates over 110 factories across Europe, providing comprehensive support to global automotive clients. Its Graz facility is the largest and ensures compliance with European emissions standards.
“The partnership with Magna aligns with our long term vision and strategic plan to strengthen our European operations,” said Brain Gu, vice chairman and co president of Xpeng. “This marks a significant beginning for our engagement in the European market, where we remain committed to long term investment.”
This is Xpeng’s second overseas EV plant following its facility in Indonesia, which began production in July. Both factories are part of Xpeng’s global strategy to lower costs and overcome trade barriers as Europe tightens tariffs on Chinese EV imports.
In October 2024, the European Commission concluded its anti subsidy investigation into Chinese EV imports and imposed additional tariffs for five years. These tariffs add to the standard 10 percent duty. Tesla faces 7.8 percent, BYD 17 percent, while Nio and Xpeng both face 20.7 percent. By producing locally in Austria, Xpeng is aiming to mitigate these added costs and strengthen its competitive position in Europe.
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