XPeng in talks to buy a Volkswagen plant in Europe as exports surge 62%

XPeng (XPEV) is in talks with Volkswagen about acquiring a factory in Europe as the Chinese EV maker’s contract production in Austria runs out of capacity. The company’s exports hit a record 6,006 vehicles in April, up 62% year-over-year.

The move comes just one day after BYD revealed it is also pursuing European factory deals with Stellantis and other automakers, signaling a broader wave of Chinese automakers moving to localize production on the continent.

XPeng outgrowing its Austrian production line

Elvis Cheng, XPeng’s managing director of northeastern Europe, revealed the negotiations at the Financial Times’ Future of the Car summit on Wednesday. He confirmed XPeng is discussing with Volkswagen the possibility of finding a production location in Europe, according to a Financial Times report.

XPeng currently builds vehicles for the European market at the Magna Steyr plant in Austria, which has been producing the G6 and G9 models since September 2025 to avoid the EU’s steep tariffs on Chinese-made EVs. The company also completed trial production of its 2026 P7+ electric sedan at the facility in January.