Xpeng Motors is looking for a production base in Europe, becoming the latest Chinese electric car maker hoping to mitigate the impact of import tariffs by producing cars locally in Europe.
Xpeng Motors CEO He Xpeng recently revealed in an interview with Bloomberg that as part of its future plan to localize production, Xpeng Motors is now in the early stages of site selection in the EU.
He Xpeng said that Xpeng Motors hopes to build production capacity in areas with "relatively low labor risks." At the same time, he added that since efficient software collection mechanisms are crucial to the intelligent driving functions of cars, Xpeng Motors also plans to build a large data center in Europe.
Xpeng Motors also believes that its advantages in artificial intelligence and advanced assisted driving functions will help it enter the European market. He Xpeng said this is one of the reasons why the company must build large data centers locally before introducing these capabilities to Europe.
He Xpeng said that Xpeng Motors has invested heavily in research and development in artificial intelligence-related fields, including independently developing chips, and pointed out that semiconductors will play a more critical role in "smart" cars than batteries.
He Xpeng said: "Selling 1 million artificial intelligence cars every year will be a prerequisite for eventually becoming a winning company in the next ten years. During daily commuting in the next ten years, the average number of times a human driver touches the steering wheel may be less than once a day. . Starting next year, companies will launch such products, and Xpeng Motors will be one of them."
In addition, He Xpeng believes that Xpeng Motors’ globalization plan will not be affected by higher tariffs. Although he pointed out that "profits from European countries will decrease after tariffs increase."
Establishing a production base in Europe would see Xpeng join a growing list of Chinese electric carmakers, including BYD, Chery Automobile and Zhejiang Geely Holding Group's Jikrypton. These companies all plan to expand production in Europe to mitigate the impact of the EU's tariffs of up to 36.3% on imported electric vehicles made in China. Xpeng Motors will face an additional tariff of 21.3%.
The tariffs imposed by Europe are just one aspect of a broader global trade dispute. Previously, the United States has imposed tariffs of up to 100% on imported electric vehicles made in China.
In addition to the trade dispute, Xpeng Motors faces weak sales in China, product planning disputes and a protracted price war in the Chinese market. Xpeng Motors' share price has fallen by more than half since January this year.
In the first half of this year, Xpeng Motors delivered about 50,000 vehicles, only about one-fifth of BYD's monthly sales. Although Xpeng's deliveries in the current quarter (the third quarter of this year) exceeded analysts' expectations, its projected revenue was well below expectations.
Post time: Aug-30-2024