Xpeng executive says EV maker will expand European production ahead of local content rules

Xpeng to Accelerate European EV Manufacturing Ahead of EU’s Local Content Mandates

Xpeng's Strategic Expansion in Europe

LONDON, Oct 12 (Reuters) - Chinese EV maker Xpeng plans to expand its European production in order to comply with new European Union rules mandating minimum local content in electric cars, company vice president Yeqing Zheng told Reuters at the Paris car show. 

Current Production Arrangements

• Magna currently produces EVs under contract for Xpeng at a factory in Austria.

• Zheng said the volume at that factory "is not even sufficient" for Xpeng's needs as the company expects to continue growing by "high double digits" in Europe.

Plans for Additional Production

Partnerships and New Facilities

• The executive told Reuters that the additional production would be in partnership with a local manufacturer either to build a new plant or operate an existing one.

Focus on Mid-Level Vehicles and Cost Efficiency

• The new production line would focus on building “mid-level” vehicles and would need to have a lower cost base than the factory in Austria.

Timeline and Decision Making

• Zheng said the new assembly line should start production by the time the European Union’s ‘made in Europe’ rules take effect.

• The Xpeng executive told Reuters that a decision on a new production line will be made within months.

Building a Local Supply Chain

Challenges in Battery Sourcing

• The Chinese EV maker is currently working on building out a local supply chain to support more production and it will be "challenging" to find a battery supplier that can meet Xpeng's charging needs and produce cells with the right energy density.

Reporting

(Reporting By Nick Carey)