Xpeng says US tariffs on Chinese EVs detrimental to meeting carbon neutrality
Xpeng Co-President Brian Gu poses for a photograph standing between the Xpeng X9 and G6 vehicles during the company's debut ceremony in Hong Kong, China May 17, 2024. REUTERS/Lam Yik
HONG KONG (Reuters) -Chinese electric vehicle maker Xpeng said on Friday new U.S. tariffs on Chinese EVs are detrimental to achieving carbon neutrality and green energy transition.
"It will result in higher costs," Xpeng co-President Brian Gu told media in Hong Kong where the company launched two EV models.
"This has no impact on Xpeng Motors at the moment, but for such a large market as a whole, I hope that in the future it can become more open, allowing global products to enter and compete."
The Xpeng G6 vehicle is displayed during the company's debut ceremony in Hong Kong, China May 17, 2024. REUTERS/Lam Yik
There are relatively few Chinese-made light-duty vehicles being imported to the United States now.
Gu was speaking in Hong Kong where Xpeng has teamed up with Malaysia's Sime Darby Motors to sell its electric sport utility vehicle, G6, and flagship seven-seater, X9, as it expands beyond mainland China's overcrowded car market.
The Xpeng G6 vehicle is displayed during the company's debut ceremony in Hong Kong, China May 17, 2024. REUTERS/Lam Yik
A cut-throat price war and slowing demand in China are hurting Chinese car makers, which are looking to cushion the blow by ramping up expansion overseas.
Other Chinese EV makers already present in Hong Kong include BYD and Great Wall Motor.
The number of China-made EV models sold in Hong Kong rose from one in 2018 to 20 in 2023, according to consultancy CBRE, highlighting strong growth in the Asia financial centre.
Their overseas expansion is overshadowed, however, by an anti-subsidy probe launched by the EU into EV imports from China, the world's largest car market, as well as U.S. tariff hikes announced earlier this week.
The Xpeng eVTOL flying car X2 is displayed during the company's debut ceremony in Hong Kong, China May 17, 2024. REUTERS/Lam Yik
"What is the flexibility or room for margins that we can have in order to meet changes in tariffs in other regimes," Gu said, adding it that was still assessing the level of EU tariffs that would make the company shift production overseas.
XPeng already sells EVs in the Netherlands, Norway and Germany and has said it plans to enter other European markets including, Italy and the UK.
The company said earlier this week that it was entering the French market despite the looming tariffs.
Highlighting stiff competition in China, Nio on Wednesday launched the first vehicle in its new lower-priced brand Onvo which aims to compete there with Tesla's Model Y.
Volkswagen-backed Xpeng expects its upcoming Mona-branded EV will be the first in China priced below $21,000 to have high-level self-driving features.
(Reporting By Anne Marie Roantree; Editing by Miyoung Kim and Subhranshu Sahu)