21:22 14-05-2026
XPeng in Talks with Volkswagen to Buy a European Factory for EVs
Chinese EV maker XPeng is in talks with Volkswagen to buy a factory in Europe, aiming to boost local production, cut costs, and avoid tariffs. The deal could reshape the EV landscape.
XPeng is in talks with Volkswagen and other automotive groups to buy a factory in Europe, the Financial Times reports. If the deal goes through, it could make the Chinese EV maker the next brand from that country to set up its own production on the continent.
For XPeng, this is more than just a matter of image. Right now, cars for Europe are built by Magna Steyr in Austria, but that capacity may not be enough to support growing sales. A local plant would allow XPeng to ramp up deliveries faster, cut logistics costs, and lessen the impact of European tariffs on Chinese electric vehicles.
Elvis Cheng, XPeng's head for northeastern Europe, confirmed the company is scouting for a suitable site. He noted that some Volkswagen factories are a bit old, meaning adapting them for modern EVs may not be quick or cheap. That's why XPeng is also considering building a new plant from scratch.
Volkswagen has its own reasons for the talks. The German automaker is going through a painful restructuring—cutting costs, rethinking plant utilization, and searching for ways to use excess capacity. CEO Oliver Blume has previously said Volkswagen is open to working with Chinese automakers that need European production sites.
The two companies are already linked. In 2023, Volkswagen invested about $700 million in XPeng, taking a roughly 5% stake. Together, they have begun producing the first jointly developed car for China—a market where the German giant is struggling to keep up with local EV brands.
For Europe, a potential deal carries symbolic weight. Not long ago, Chinese brands were trying to prove their EVs could compete with European ones. Now they might start building those cars at the very factories that European automakers can't keep busy with their own models.
XPeng needs speed. Volkswagen needs an outlet for its surplus capacity. If the deal happens, it won't just be the purchase of a few factory buildings—it will be another sign that the center of gravity in the EV industry has already shifted considerably.