XPeng is negotiating with Volkswagen to purchase a manufacturing plant in Europe. Managing director Elvis Cheng announced the move at the Financial Times' Future of the Car summit. The automaker aims to establish local production to bypass European Union import tariffs of up to 35.5%.
International sales for the company have surged recently. Exports increased 55% year-over-year during the first four months of 2026. This growth has strained current production capabilities at XPeng’s contract facility with Magna Steyr in Austria.
The potential acquisition follows a deepening partnership between the two firms. Volkswagen previously acquired a 5% stake in XPeng in 2023. This move aligns with a broader trend of Chinese EV manufacturers localizing production within Europe.