XPeng in talks to buy VW factory

Chinese electric-vehicle maker XPeng is in talks with Volkswagen and other automakers about buying a factory in Europe, according to remarks made by an XPeng executive at the Financial Times’ Future of the Car summit in London on May 13. The discussions point to a possible shift from XPeng’s current European contract-assembly model toward a larger owned manufacturing base on the continent. No plant, price or timetable has been disclosed. Volkswagen has not announced any sale, and the companies’ existing relationship already includes a strategic partnership in China. ### Who said XPeng is looking for a factory in Europe? Elvis Cheng, XPeng’s managing director for northeastern Europe, said on May 13 that the company was in talks with Volkswagen and other automakers about finding a production location in Europe, according to reports from the Financial Times and Reuters. Reuters said the discussions involved a possible factory purchase in Europe. The London event where Cheng spoke ran from May 12 to May 14, according to the summit organizer’s agenda. Cheng’s remarks were reported on May 13 and May 14 by multiple auto-industry outlets citing the summit and the Financial Times. ### Why would XPeng want a European plant now? XPeng already has local manufacturing ties in Europe through Magna Steyr’s facility in Graz, Austria. (msn.com) XPeng said on Jan. 9 that pilot production of the P7+ had been completed at Magna Steyr, calling the site its first local manufacturing partner in Europe. The company said the P7+ would become the third XPeng model produced and assembled in Europe, after the New G6 and New G9. (car.live.ft.com) Industry reports said XPeng’s current Austrian arrangement is nearing capacity as the company expands in Europe. Electrek reported XPeng’s exports reached 6,006 vehicles in April, up 62% from a year earlier, and said the push for another plant came as the Graz line ran short of room. That capacity explanation comes from trade and industry reporting, not from a detailed public filing by XPeng. (xpeng.com) ### What does Volkswagen have to do with XPeng besides this report? Volkswagen and XPeng have been partners since 2023. Volkswagen said it agreed in 2023 to invest about $700 million in XPeng via a capital increase and would hold about 4.99% of the company. The two companies also signed a framework agreement for long-term cooperation on electric vehicles for China. (electrek.co) In March 2026, Volkswagen said the first vehicle jointly developed with XPeng had entered series production in Hefei. Volkswagen described that model, the ID.UNYX 08, as the first Volkswagen vehicle from the partnership to reach production. (volkswagen-group.com) ### Is Volkswagen actually selling a plant? Volkswagen has not publicly identified a factory for sale to XPeng. Reuters reported only that XPeng was in talks with Volkswagen and other automakers about buying a factory in Europe. The reporting did not name a site or say that an agreement had been reached. (volkswagen-group.com) Oliver Blume, Volkswagen’s chief executive, said days before the report that the company could bring China-developed cars to Europe or share factory capacity in Europe with Chinese partners, according to Reuters’ account of the matter. That comment showed Volkswagen was at least publicly discussing broader options for using European capacity, but it did not amount to a sale announcement. (msn.com) ### What would have to happen next for this to become real? A deal would require the companies to name a plant, agree on terms and disclose a timeline. Any transaction involving a European factory would also be likely to draw scrutiny from labor representatives, local governments and, depending on the structure, foreign-investment or competition authorities. For now, the public record is limited to Cheng’s remarks, Reuters’ report and the companies’ earlier partnership disclosures. (msn.com) The next concrete step would be a statement from XPeng or Volkswagen, or a filing that identifies the site, the buyer and the conditions of any transaction.