CEO said the company expects to see the industrial park bring in 80 to 100 companies from the supply chain in the next 2 to 3 years.

(Image credit: Zhaoqing government)

A year ago, (NYSE: NIO, HKG: 9866, SGX: Nio) signed an agreement to build NeoPark with the city of Hefei in Anhui province, where its factory is located, and now its local counterpart Xpeng Motors (NYSE: XPEV, HKG: 9868) has reached a similar deal.

The Zhaoqing High-Tech Zone management committee in Guangdong province signed a framework agreement with Xpeng today to build an intelligent auto parts industrial park, according to a press release from the city government.

The two sides will establish a joint investment promotion work mechanism and an interactive exchange mechanism between the government and the company, and jointly promote companies from upstream and downstream of Xpeng's industrial chain to set up projects in the industrial park, according to the press release.

From these statements, the positioning of the industrial park appears to be similar to NeoPark. Xpeng's factory is located in Zhaoqing and has an annual capacity of about 200,000 vehicles.

On April 19, 2021, the construction of NeoPark, jointly promoted by Nio and the Hefei municipal government, officially started. The park covers an area of 16,950 mu (11.3 km2) and is divided into an intelligent manufacturing area, an R&D living area and an ecological and cultural area.

William Li, founder, chairman and CEO of Nio, said at the time that their goal was to create an intelligent electric vehicle (EV) industry cluster.

Hefei will increase its support for the intelligent EV industry, introduce more high-quality enterprises in the industry chain to NeoPark, and provide supporting policy support in construction, funding, and talent, according to a previous press release.

Nio, on the other hand, will carry out long-term development planning and layout around the park, establish R&D and manufacturing, marketing and management teams in the park, and help Hefei further introduce industry chain companies.

Back to the industrial park of Xpeng, its first phase will cover 1,048 acres (0.7 square kilometers) and be located in Zhaoqing Dawang New Energy Intelligent Vehicle Industrial City.

Xpeng and Zhaoqing will work together to create a complete and highly aggregated industrial chain and promote projects including automotive manufacturing, batteries, motors, electric controls, and automotive aftermarket to be set up here, according to the press release today.

Xpeng expects to see projects from 80 to 100 companies in the upstream and downstream supply chains to the park in the next two to three years, said He Xiaopeng, the company's chairman and CEO.

The company will work with Zhaoqing High-tech Zone to promote the construction of Dawang New Energy Intelligent Vehicle Industrial City and jointly build a world-class new energy intelligent vehicle industry cluster to help build a world-class advanced manufacturing industry cluster in Guangdong province, Mr. He said.

Six Xpeng suppliers signed with Zhaoqing today to set up projects here, with their planned investments totaling RMB 1.32 billion, according to the release.

The arrival of these projects marks the official launch of the construction of an intelligent auto parts industrial park with Xpeng as its core, the release said.

Notably, in addition to the Xpeng-related project, the press release from the Zhaoqing municipal government also mentioned that Contemporary Amperex Technology Co Ltd (, SHE: 300750), China's largest power battery manufacturer, has officially started production at its local plant.

CATL signed a contract in February 2021 to set up a power and energy storage battery project in Zhaoqing with an initial investment of RMB 12 billion ($1.8 billion), the largest single investment in Zhaoqing's history.

The project started on March 28, 2021 and took 6 months to complete the topping out of the 500,000 square meter plant and saw the first equipment installed on site within 8 months.

Ten months after the project began, the first battery pack samples rolled off the production line and production started 14 months after the start of construction, a press release from the Zhaoqing government said.

Based on the two projects, Xpeng as well as CATL, the Zhaoqing municipal government has planned the construction of the 45-square-kilometer Dawang New Energy Intelligent Vehicle Industrial City, which will be turned into a national-level new energy intelligent vehicle industrial city, according to the press release.