Xpeng Launches Local Production in Europe, Marking a Milestone in the EV Industry
In a significant advancement for the electric vehicle (EV) sector, the Chinese brand Xpeng has inaugurated its first local production line in Europe. This landmark decision positions Xpeng as one of the pioneering Chinese companies to manufacture vehicles on the continent. The assembly operations will take place at Magna’s facilities in Graz, Austria , where Xpeng will produce its best-selling models tailored for the European market.
A Key Movement. The strategic choice to establish local manufacturing is a direct response to the tariffs imposed by the European Union on electric vehicles produced in China, which can escalate up to 35.3% for certain manufacturers. This figure compounds to a 10% base tariff , making local production a financially viable alternative. For Xpeng, categorized as a “cooperating” entity in European subsidy research, the additional taxation amounts to a manageable 20.7% .
<span>Xpeng G6. Image: Xpeng</span>The Choice of the Perfect Partner. Xpeng’s collaboration with Magna Steyr is strategic. The Graz facility is not just any manufacturing plant; it has an impressive track record, producing vehicles for high-end brands like Mercedes-Benz , BMW , Jaguar Land Rover , and Toyota . Specialized in flexible production with low volumes, Magna is recognized for its ability to assemble multiple complex models on shared production lines. Notably, it is the site where iconic models like the Mercedes-Benz G-Class and the BMW Z4 are manufactured.
The Numbers Speak. From January to July 2025, Xpeng achieved remarkable sales figures, with 18,701 vehicles sold abroad, showcasing a staggering 217% increase year-over-year. Specifically, in Europe, the brand sold over 8,000 units in the first half of 2025 alone. The G6 model emerged as a standout, accounting for an impressive 67% of the brand’s total sales in the region, establishing itself as the flagship model in Europe.
<img alt="The Chinese automotive industry is moving to colonize Africa and Latin America. Also to be your springboard" width="375" height="142" src="https://i.blogs.es/558045/byd/375_142.jpeg"/>More than a Factory. Xpeng’s ambitions in Europe extend beyond mere production. The company has recently opened its first European research and development center in Munich, Germany . This facility is anticipated to promote technical collaboration while adapting products for local consumers. According to Xpeng’s CEO He Xiaopeng , the center is also projected to focus on developing conceptual prototypes, steering an ecosystem that emphasizes intelligent electric vehicles , humanoid robotics , and even flying vehicles .
The Time Factor. Xpeng has successfully outpaced competitors like BYD in the race for local production in Europe. While full-scale serial production in Austria is set to commence shortly, BYD’s Hungarian production is expected to kick off later in the year.
And Now What. Xpeng plans to broaden local production to include additional models like the new Xpeng P7+ , touted as its “AI car.” With a presence in over 46 countries and regions since entering Norway in 2021, Xpeng exemplifies the Chinese automotive industry’s ambition to expand its footprint globally. This expansion strategy not only emphasizes local manufacturing but also aims to enhance brand visibility and acceptance in international markets, setting the stage for future growth.
Cover Image | Xpeng
In conclusion, Xpeng’s foray into local manufacturing in Europe not only addresses tariff challenges but also signals a robust strategy for international expansion, underscoring the competitive nature of the global electric vehicle industry. This move could very well redefine market dynamics, giving Xpeng a strategic edge over its rivals.