XPeng is scouting production sites in Europe to circumvent imposed tariffs on Chinese EVs

XPeng Motors appears to be the latest Chinese automaker looking to bring localized EV production to Europe. During a recent interview, XPeng’s founder, chairman, and CEO, He Xiaopeng, shared that the company is exploring potential sites in the EU to set up local BEV production.

Now that the European Commission has imposed its initial tariffs on Chinese-built EVs, we are seeing some of the response from overseas automakers that appear to not be deterred in their plans for global expansion.

For example, Chinese automakers like BYD, Chery, and ZEEKR have pushed forward in expanding sales in Europe and have begun establishing localized production. One of the BEV leaders in the country, NIO, has committed to new markets in Europe, regardless of any loss of profits due to the tariffs, which currently can go as high as 36.3%.

XPeng Motors is currently facing a 21.3% tariff on EV imports while its production remains in China. To alleviate that upcharge, the XPeng is leveraging its recent partnership with Volkswagen Group and looking to expand vehicle production to a new site in Europe.

XPeng seeking “low labor risks” for production in Europe

In a recent interview with Bloomberg, XPeng founder He Xiaopeng divulged the Chinese automaker’s plans to bring local production to Europe. Per the interview, Xiaopeng said XPeng was already in the initial stages of selecting a site in the EU and is expecting to choose a region with “relatively low labor risks.”

In addition to a new EV production epicenter in Europe, XPeng is also planning to establish a large-scale data center in the region. It states that efficient software collection has become vital to studying and improving its BEV’s intelligent driving features.

Xiaopeng shared a sentiment similar to that of his company’s competitors, stating that increased tariffs will not deter Chinese automakers from their global expansion plans. However, he admitted that “profits from European countries will be reduced after the tariff increase.”

XPeng has already established a foothold in several European markets, including Denmark, France, Norway, Sweden, and Germany – where the automaker recently began testing its XNGP ADAS ahead of a full planned rollout in Europe.

Localized production in Europe could help XPeng strengthen its presence in the region and eventually achieve the profit margins it has been chasing for years.

Whether the EU likes it or not, the Chinese automakers are coming and bringing with them an arsenal of some of the best EV technology out there. Their dedication to their expansion goals is admirable, but with 100% tariffs being imposed in the US and now Canada, don’t expect to see these models in North America (at least North of Mexico) any time soon.