Magna starts contract assembly of Xpeng EVs in Graz

Magna’s plant in Graz, Austria is making the G6 and G9 SUVs for the European market from semi-knockdown (SKD) kits imported from China. 

It is the first complete assembly of a Chinese vehicles at the Graz plant and aligns with Xpeng’s efforts at localisation in Europe in the face of higher tariffs on EV imports imposed by the EU in October last year.

The EU is applying tariffs on finished Chinese EVs, with the fee subject to the company making them. SAIC faces the highest rate of 35.3%, while those made by the firms Geely and BYD face tariffs of 18.8% and 17%, respectively. Xpeng is charged a 20.7% extra duty on top of the 10% existing import fee making it around 31% for the finished vehicles imports to Europe. It has been importing the G6 and G9, as well as the P7 sports sedan. Xpeng cars are sold in Benelux, Czech Republic, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Switzerland, the UK and Ireland. 

The switch to containerised SKDs means Xpeng does not have to pay the full import duty.

Brian Gu, vice-chairman and president of Xpeng said the move to localised assembly at the Magna plant was a first step in the carmaker’s long-term commitment in Europe.

Magna said the start of production for Xpeng marks a long-term collaboration on future models. Magna is also reported to be starting production for Chinese carmaker GAC, though it has not confirmed this. 

“We are thrilled to collaborate with Xpeng, marking a significant milestone as our first Chinese OEM partner here in Europe,” said Roland Prettner, president of Magna Complete Vehicles. “This partnership underscores our commitment to innovation and flexibility in meeting the evolving needs of the automotive industry. By leveraging our extensive experience and state-of-the-art facilities, we are well-positioned to support Xpeng’s ambitious goals for the European market.” 

Magna began assembling EVs in China in 2018 through a joint venture with BJEV, a subsidiary of the BAIC Group. The facility in Zhenjiang has an annual capacity of 150,000 vehicles and serves as a one-stop shop offering platform development, engineering services and contract manufacturing. The plant makes four variants of the ArcFox EV. 

“Our partnership with Magna fits perfectly in our vision and strategy to strengthen our European capabilities,” said Brian Gu, Vice Chairman and President of Xpeng. “It is a first step in our growth in Europe as we have a long-term commitment to Europe.”