• Xpeng's first European production facility is in Austria, where the first batch of G6 and G9 SUVs have rolled off the line.
• The plant will expand production to include more Xpeng models in the future.

Xpeng (NYSE: XPEV) has commenced localized production in Europe, which is expected to help it expand its market share by mitigating the impact of high tariffs.

The company's first European localized production project has officially commenced at the Magna plant in Graz, Austria, it announced today.

The first Xpeng G6 and G9 SUVs (sport utility vehicles) produced at the facility have successfully rolled off the assembly line, the Chinese electric vehicle (EV) maker said.

In the future, the factory will also begin production of additional Xpeng models, including pure-electric platform sedans, midsize SUVs, mid-to-small-size SUVs, and hybrid vehicles, it said.

Xpeng is deepening its European market presence with a broader product portfolio, accelerating its global expansion through "Chinese smart manufacturing," the company said.

The factory was not built from scratch but leveraged the existing, proven production lines of Magna, the Canadian automotive parts giant.

Magna originated in Canada, subsequently expanded its operations across the North American market, and entered the European and Asian markets.

The Xpeng factory utilizes facilities belonging to Magna Steyr, a subsidiary of Magna and a contract manufacturer headquartered in Austria.

The partnership with Magna aligns with Xpeng's long-term vision and strategic plan to strengthen its European operations, said Brain Gu, vice chairman and co-president of the EV maker.

This marks a significant beginning for Xpeng's deepening engagement in the European market, where the company remains committed to long-term investment, Gu said.

Magna Steyr operates over 110 factories across Europe, ready to provide comprehensive support to Chinese OEM clients at any time, said Roland Prettner, president of the Magna subsidiary, during communications with Chinese media in October 2023.

The Graz facility in Austria serves as Magna and Magna Steyr's largest plant, ensuring products for Chinese OEM clients fully comply with European emissions reduction requirements, Prettner noted.

This marks Xpeng's second overseas EV factory following the commencement of production at its Indonesian facility in July, helping the company avoid additional costs stemming from the EU's high tariffs.

The European Commission concluded its anti-subsidy investigation into EVs imported from China in late October 2024, deciding to proceed with imposing additional tariffs for a five-year period.

These tariffs are imposed on top of the original 10 percent duty, with different rates applying to various EV manufacturers: Tesla (NASDAQ: TSLA) faces 7.8 percent, BYD 17.0 percent, and both Nio (NYSE: NIO) and Xpeng 20.7 percent.