The push stems from constraints at Xpeng's current European production setup.

May 14, 2026

Chinese electric vehicle manufacturer Xpeng is negotiating with Volkswagen and several other carmakers to purchase a manufacturing plant in Europe, aiming to solidify its presence across the region.

Elvis Cheng, Xpeng's managing director for northeastern Europe, verified these talks during the Financial Times' Future of the Car summit.

Cheng noted that Xpeng is also evaluating the construction of a brand-new facility in the area.

This initiative arises from production bottlenecks at Xpeng's present European operation, which depends on contract manufacturer Magna Steyr's facility in Austria, per the Financial Times.

Volkswagen owns a 5% share in Xpeng, obtained via a $700 million investment in 2023 that included collaboration on EV projects in China.

"We are discussing with [VW] to see if there is any possibility we can find a location here in Europe," Cheng stated.

Just Auto has contacted VW for a response.

The German giant is undergoing major changes, planning to slash about 750,000 units of yearly capacity and trim its German staff by 50,000 by 2030, plus an additional 500,000-unit cut at other European locations.

Group CEO Oliver Blume mentioned late last April that the firm is exploring "opportunities for our Chinese partners in Europe" to utilize excess capacity.

VW's first-quarter operating profit dropped 14.3%, blamed on US tariffs and fierce rivalry in China, with the company admitting current cost reductions fall short.

In addition to EVs, Xpeng is advancing flying cars and humanoid robots, set for European debuts next year.

This follows comparable strategies in the industry.

Earlier this week, Stellantis and Ford signaled that alliances with Chinese firms and traditional competitors are vital amid soaring expenses and weak demand in European auto markets.

BYD is reportedly negotiating with Stellantis and various other European manufacturers to absorb unused production capacity continent-wide.