Chinese manufacturer XPeng is taking a decisive step in its expansion strategy. Thanks to an unprecedented agreement, its electric SUVs will soon be assembled in Europe by Magna Steyr in Graz, Austria. This marks a turning point for the brand, and reflects a wider trend towards localising Chinese production to avoid heavy taxes in the European Union.
A strategic partnership in Austria
Magna, a Canadian subsidiary with over 300 production sites worldwide, has been chosen to manufacture the G6 and G9. These models, already sold on the continent, will now come directly from the Austrian factory. According to XPeng, this decision represents a first step towards a sustainable commitment in Europe, while accelerating its conquest of the market.
Getting around European surcharges
The European Union imposes high taxes on vehicles imported from China, reaching 31% for XPeng. By localising its production, the company is considerably reducing these costs, while at the same time gaining greater responsiveness to local demand. This strategy is part of a wider movement: several Chinese manufacturers, including BYD, Chery and Leapmotor, have already announced similar projects on European soil.
GAC and other players are following suit
XPeng is not the only company to benefit from Magna’s expertise. Chinese manufacturer GAC, with its Aion brand, has also entrusted the assembly of its electric models to the Graz plant. Recently presented in Munich, this brand plans to start sales in Poland, Portugal and Finland, before expanding across the continent by 2028.
A new lease of life for Magna Steyr
For Magna Steyr, this contract comes at just the right time. The Austrian plant had lost several major programmes, notably with BMW and Jaguar. The arrival of XPeng and GAC has given a significant boost to this historic site, already renowned for its production of the Mercedes G-Class. This momentum illustrates the determination of Chinese carmakers to integrate rapidly and sustainably into the European automotive landscape.
