Xpeng charts steady global expansion

BEIJING: Chinese electric vehicle maker Xpeng Inc. is ramping up its global expansion, despite the intensifying trade war between Washington and Beijing, and the European Union's punitive tariffs against Chinese cars.

Xpeng hosted its first global launch of a flagship vehicle, the X9 minivan, in Hong Kong on Wednesday - attended by more than 800 journalists, and electric cars owners from 30 countries and regions.

The event came after Xpeng announced plans to localize production for the Indonesian market and set up an R&D center in Germany.

The timing shows that despite the volatile relationship between the US and China, and Europe's moves to curb Chinese EV imports, Xpeng's pace of international expansion remains steadfast, founder and Chief Executive Officer He Xiaopeng said in an interview with Bloomberg Television.

"What's certain is that Europe has clearly started implementing the tariffs," He said. "For Xpeng's globalization path, we believe that only through localization, such as local research and development, local services, local production and local sales can we become truly international-facing."

The company is watching negotiations between China and the EU on tariffs closely, and continues to think about how to improve localization in Europe and other regions, He said, adding that Xpeng has already laid good groundwork in Northern Europe in recent years, becoming the top-seller in the medium-to-large electric sport utility vehicle segment.

As for the tariff tit-for-tat between Washington and Beijing that's upending global trade, Xpeng's Vice Chairman and Co-President Brian Gu told reporters on Wednesday that the company has done a thorough analysis of its supply chain to ensure it won't be affected.

While current sales aren't impacted so far, as Xpeng doesn't sell in the US, it might be difficult to escape the economic volatility, Gu said.

The manufacturer is also seeking to rebrand as an AI company - developing products such as robotaxis, flying cars and humanoid robots.

It has designed its own AI chip that will be fitted into Xpeng vehicles, starting in mainland China, from the second quarter of this year.

Automotive chips are generally not impacted by US export restrictions on advanced semi-conductors, but Chinese authorities have asked domestic EV makers to expand their buying of homegrown chips and other components, Bloomberg News reported last year.

"The most important reason for Xpeng in designing our own AI chip is to fully realize our capability," CEO He said.

"We are working on autonomous driving that will work all over the world. We need the chips to help us better perform in conditions at night, or with glare," he said, adding that they will still continue to work with other semiconductor companies such as Nvidia Corp.

Xpeng had a good start to the year, delivering more than 94,000 vehicles in the first quarter - overtaking Nio Inc. and Li Auto Inc. to rank top among the electric vehicle upstarts.

Its US-traded shares have risen almost 60% this year. He said the company plans to become profitable by the fourth quarter of 2025.