Chinese electric vehicle maker Xpeng (XPEV) is now working towards producing two new models of its smart electric vehicles (EVs) specifically for the European market. Xpeng has tied up with automotive supplier Magna (MGA) to commence limited assembly of the models before the end of September.
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Magna revealed the deal on Monday, noting that it will support the EV producer in making the new models. The Ontario-based supplier added that the contract is the first from a Chinese automaker to localize production in its complete vehicle operations in Europe. The models are to be manufactured at Magna’s base in Graz, Austria.
Xpeng Targets European Market
Brian Gu, Xpeng’s vice chairman and president, noted that the partnership with Magna aligns with the company’s strategy “to strengthen our European capabilities.” “It is a first step in our growth in Europe as we have a long-term commitment to Europe,” Gu added.
The latest update comes as Xpeng, which was founded in 2014, continues to grow its EV business, rising as a key rival to Texas-based Tesla (TSLA). Xpeng’s P7+ and G6 SUV models have emerged as competitors against Tesla’s Model 3 and Model Y, respectively.
Last month, the Chinese automaker reported explosive growth in sales following its delivery of over 37,700 smart EVs. This set a new record for the company’s monthly deliveries.
Moreover, Xpeng has also continued to show resilience. Its shares have been rising in recent days, despite being forced to recall over 47,000 units of its P7+ electric sedans due to the danger of a steering assist failure.
Meanwhile, Chinese automakers are eager to expand their market share in Europe as fierce competition at home puts pressure on sales. Furthermore, Xpeng’s new target emerges as global EV sales have begun to slow down, including in China, the world’s largest car market.
Is XPEV a Good Stock to Buy?
Turning to Wall Street, Xpeng’s shares have a Moderate Buy consensus recommendation based on nine Buys, two Holds, and one Sell assigned by 12 Wall Street analysts over the last three months. In addition, the average XPEV price target of $25.75 suggests a potential upswing of 23% from its current level.
