Chinese electric vehicle manufacturer Xpeng is discussing the possibility of acquiring production facilities in Europe, including from German automaker Volkswagen, according to the Financial Times, citing Elvis Chen, the company's managing director for northeastern Europe.

According to Cheng, Xpeng is considering various options for locating its own production in the region, as existing facilities don't fully meet the company's needs. Specifically, he noted that Volkswagen's plants are "a bit outdated." Volkswagen did not respond to the publication's request for comment.

Xpeng currently produces cars in Europe through contract manufacturing with the Austrian company Magna Steyr, but these facilities are already operating at capacity. Meanwhile, the Chinese side is considering building a new plant in the region.

The negotiations come amid an existing partnership between the two companies: in 2023, Volkswagen invested approximately 700 million USD in Xpeng in exchange for a stake of almost 5% and agreed to jointly develop electric vehicles for the Chinese market.

Meanwhile, the German concern is undergoing a period of restructuring amid increasing competition. At the end of 2025, Volkswagen closed one of its German plants and plans to cut 50 thousand jobs in the country by 2030.