Xpeng Takes on Europe: The Fight Against New Tariffs on Chinese EVs

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As the European Union prepares to vote on imposing new tariffs on Chinese-made electric vehicles (EVs), Xpeng, a prominent Chinese EV startup, is making its case for fair competition. The CEO, Brian Gu, believes that the success of China’s EV industry stems from fierce local competition rather than government support.

The Push for Fair Competition

On Friday, the EU is expected to finalize tariffs of up to 35.3% on Chinese EVs, adding to the existing 10% duty. This move comes after accusations that Chinese companies benefit from unfair state support. However, Gu argues that the landscape of the EV market in China has changed dramatically, with many startups failing due to intense competition.

“There were once close to 500 Chinese EV startups; now, fewer than 10% remain,” Gu stated at a conference in Berlin. He emphasizes that this competitive environment has fostered a “highly efficient” and “innovative” industry capable of thriving in international markets.

Xpeng’s Ambitions in Europe

Xpeng is not just watching from the sidelines; it is actively expanding its presence in Europe, currently selling in about a dozen markets. Gu is adamant about introducing cutting-edge technology developed in China to European customers, stating, “We want to bring the best technology that has developed in a highly competitive and iterative Chinese market to European customers.”

Interestingly, Gu notes that Xpeng’s entry-level model is priced similarly to Tesla’s Model Y, countering claims that the startup is undercutting established automakers.

Record Sales Amid Challenges

Xpeng recently reported impressive sales figures, delivering 21,352 vehicles in September—a record for the company. For the third quarter, it delivered 46,533 cars, marking a 16% increase from the same period last year. The startup generated 8.1 billion yuan ($1.1 billion) in revenue for the quarter ending June 30, a significant 60% jump from the previous year, although it also faced a net loss of 1.28 billion yuan ($180 million) during that period.

Despite Xpeng’s achievements, the new EU tariffs pose a significant hurdle. Some member states, including Germany and Spain, have urged the European Commission to reconsider the proposed taxes, citing concerns over a potential trade conflict. Major German brands like BMW and Volkswagen, which have a considerable presence in China, have voiced opposition to the tariffs.

The EU’s support for these tariffs is evident, as reports suggest there is enough backing to move forward. However, there are fears that these tariffs could trigger a trade war with China, especially after Beijing initiated anti-dumping probes into European products following the EU’s investigation into Chinese EVs.

A Call for Dialogue

German Vice-Chancellor Robert Habeck, who attended the conference with Gu, expressed hope for a peaceful resolution. He mentioned that Beijing has proposed a political solution to the conflict and encouraged the EU to remain open to discussions, even if it feels late in the process.

Discussions between Beijing and Brussels are expected to continue, as both sides aim to reach an agreement before the end of the month.

Conclusion

As Xpeng strives to make its mark in Europe, the looming tariffs present both a challenge and an opportunity. With a commitment to innovation and quality, the company aims to prove that it can compete fairly in the global market, despite the ongoing political tensions.

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