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Chinese electric vehicle (E.V.) maker Xpeng has expressed concerns over the new U.S. tariffs on Chinese E.V.s, stating that these measures are counterproductive to achieving carbon neutrality and advancing the green energy transition.
Xpeng’s co-president, Brian Gu, highlighted that the tariffs would increase costs, hindering the market’s openness and competition.
Xpeng Position and Market Dynamics:
Currently, the new tariffs do not directly impact Xpeng Motors. However, Gu emphasized the broader implications for the large E.V. market, advocating for a more open market that allows global products to compete. Few Chinese-made light-duty vehicles are imported to the U.S., but the tariffs could affect future market dynamics.
Gu made these remarks in Hong Kong during the launch of Xpeng’s two new E.V. models in partnership with Malaysia’s Sime Darby Motors.
Xpeng is expanding beyond mainland China, targeting markets like Hong Kong, where it introduced the G6 electric sport utility vehicle and the flagship seven-seater X9. Other Chinese E.V. makers, including BYD and Great Wall Motor, have also established a presence in Hong Kong.
Challenges in the Domestic Chinese Market:
Chinese E.V. makers face intense competition and slowing demand in their home market, prompting them to look overseas to cushion the impact.
The number of Chinese-made EV models sold in Hong Kong has increased significantly, from one model in 2018 to 20 in 2023, reflecting strong growth in the region’s E.V. market.
Xpeng’s overseas expansion faces challenges, such as the European Union’s anti-subsidy probe into Chinese E.V. imports and recent U.S. tariff hikes.
Gu mentioned that the company is still assessing the impact of potential E.U. tariffs and may consider shifting production overseas if necessary.
Xpeng’s Presence in Europe:
Xpeng already operates in several European countries, including the Netherlands, Norway, and Germany, and plans to enter additional markets like Italy and the U.K.
Despite looming tariffs, Xpeng announced its entry into the French market earlier this week, demonstrating its commitment to expanding its European footprint.
In response to stiff competition in China, Xpeng launched its new lower-priced brand, Onvo, to compete with Tesla’s Model Y.
Xpeng’s upcoming Mona-branded EV is expected to be the first in China priced below $21,000 to feature high-level self-driving capabilities, underscoring its competitive strategy in the domestic market.
Future Outlook and Strategic Adjustments:
Xpeng’s strategic adjustments in response to global trade challenges highlight the complexities Chinese E.V. makers face in expanding their international presence.
The company’s proactive measures to enter new markets and adapt to changing tariff regimes will preserve its competitive edge in the rapidly evolving global E.V. market.
