XPeng Could Acquire Volkswagen Factory in Europe

xpeng

Chinese automaker XPeng is exploring a major expansion in Europe as the company is reportedly in discussions with Volkswagen about acquiring one of the German automaker’s factories.

Speaking at the Financial Times’ Future of the Car summit in London this week, XPeng’s Managing Director for Northeastern Europe, Elvis Cheng, confirmed the company is actively searching for a production location in Europe and is in talks with Volkswagen and other automakers.

The potential deal would give XPeng a larger manufacturing footprint in Europe at a time when Chinese automakers are seeking to localize production and avoid steep European Union tariffs on imported electric vehicles.

“We are discussing with [Volkswagen] to see if there is any possibility we can find a location here in Europe,” Cheng said.

XPeng currently assembles vehicles for the European market at the Magna Steyr facility in Austria, where production of the G6 and G9 began in late 2025. The arrangement helped the automaker sidestep EU tariffs on Chinese-built EVs while allowing it to establish a quicker foothold in the region.

The company has already completed trial production of its updated P7+ sedan in Austria, but future growth may require significantly more capacity than Magna Steyr can provide. The company exported a record 6,006 vehicles in April alone.

XPeng is also reportedly considering building an entirely new factory in Europe, although acquiring an existing plant could dramatically reduce both costs and development timelines. Cheng suggested some older European facilities may not meet the company’s future manufacturing requirements, describing Volkswagen’s plants as “a little bit old.”

Volkswagen CEO Oliver Blume recently acknowledged the possibility of allowing Chinese partners to use some of the company’s spare European capacity, pointing to the idea already being under consideration internally.

The two companies already have close ties. In 2023, Volkswagen invested $700 million in XPeng in exchange for an approximately 5% stake and agreed to jointly develop EV technologies for the Chinese market.

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