- Xpeng is seeking to acquire European facilities as capacity at its existing Austrian contract production line is running out.
- Xpeng's overseas expansion is accelerating significantly, with exports hitting a record 6,006 vehicles in April.
Xpeng (NYSE: XPEV) is in talks with Volkswagen and other automakers about buying a factory in Europe, as the Chinese electric vehicle (EV) maker seeks to expand its international sales.
Elvis Cheng, Xpeng's managing director of northeastern Europe, revealed the plan on Wednesday at the Financial Times' Future of the Car summit.
He said Xpeng is discussing with Volkswagen the possibility of finding a production location in Europe, according to a Financial Times report.
Xpeng currently builds its vehicles at the Magna Steyr plant in Austria. The facility has been producing Xpeng's G6 and G9 models since September 2025 to hedge against high European Union tariffs.
However, Cheng noted that the existing contract production line is running out of capacity. Xpeng also completed trial production of its 2026 P7+ electric sedan at the Austrian plant in January.
Xpeng would also consider building a new manufacturing plant in Europe, the FT reported. Cheng added that not all existing factories can satisfy new product requirements, describing Volkswagen's plants as "a little bit old."
The talks come as Volkswagen faces weaker demand and rising competition in Europe. The German automaker is in the midst of a major restructuring program.
Volkswagen plans to reduce its annual capacity by about 750,000 vehicles by 2030. The company is also seeking to cut a further 500,000 units of annual capacity across Europe, with a focus on underused factories, the report noted.
Volkswagen CEO Oliver Blume said late last month that the company was considering whether to allow its Chinese partners to use some of its excess European capacity.
The two companies have already established a close partnership. Volkswagen invested $700 million in 2023 to acquire a roughly 5% stake in Xpeng.
Xpeng's overseas expansion is accelerating significantly. The company's exports reached a record 6,006 vehicles in April, surging 62.24% year-on-year and growing 27.65% from March, according to data compiled by CnEVPost.
In the January-April period, Xpeng exported 17,563 vehicles, up 55.19% year-on-year.
As China's EV industry rises rapidly and local automakers expand into overseas markets, it has become common for them to utilize their partners' overseas capacity.
BYD (HKEX: 1211) executive vice president Stella Li said on the sidelines of the same summit on Wednesday that the company is in talks with Stellantis NV and other European automakers, focusing on taking over underused car factories in the region.
Stellantis just announced a new plan earlier this month to foster closer cooperation with Leapmotor in Europe.
Stellantis and Leapmotor plan to add new production lines at the Zaragoza plant in Spain to produce a new Opel electric SUV and the Leapmotor B10 model.
The two parties also intend to transfer ownership of Stellantis' Madrid Villaverde plant to Leapmotor International's Spanish subsidiary, allocating new Leapmotor models to be produced there.
