Xpeng president says Chinese EV firm remains committed to Europe despite pressure from tariffs
Chinese electric vehicle maker Xpeng remains committed to Europe for the long term despite pressure it faces from the European Union’s tariffs, according to a top company official.
“Our plan for Europe is a very long term one,” Brian Gu, Xpeng’s vice chairman and co-president, told CNBC’s Charlotte Reed Monday at the Paris Motor Show.
Reflecting on the EU’s decision to adopt higher tariffs on Chinese EV imports, Gu said that this has put “a lot of pressure” on its business model.
However, he added that the firm has a “long-term focus” in the continent and is aiming to “find every possible way to address and make ourselves competitive.”
Gu said that Xpeng is currently reviewing multiple aspects of its business strategy — including product range, business model and pricing — as it evaluates the impact of EU tariffs.
He didn’t confirm whether Xpeng plans to pass the costs of tariffs on to its customers.
“There’s a number of areas we are looking at, examining, [and] trying to optimize,” he said.
Longer term, Gu said that Xpeng plans to become “more local” in Europe, ramping up its manufacturing capabilities in the region.
“Having local manufacturing capabilities is something a company with a long-term plan and a long-term vision has to do, It’s not because of tariffs, it’s not because of short-term policy changes,” Gu told CNBC.
Earlier this month the EU voted to adopt definitive tariffs on imports of China-made battery electric vehicles. The development was a major blow to the Chinese EV industry, which has been making significant inroads into Europe over the last several years.
The EU first announced it would slap higher tariffs on Chinese electric vehicle imports in June. At the time, the bloc said that China’s firms benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to EV producers in Europe.
Duties were also disclosed for individual companies, depending on the extent of their cooperation with the probe. Provisional duties were put in place from early July, but were revised in September based on “substantiated comments on the provisional measures” from interested parties.
Tesla, which had voiced concerns at the rate of tariffs proposed for its China-made EVs, saw its proposed tariff lowered from as much as 20.8% to 7.8%.
More costs for the industry
Gu’s comments are more tame than some of his peers in the Chinese EV industry. On Monday, Stella Li, executive vice president of Warren Buffett-backed EV firm BYD, said the EU’s planned tariffs on Chinese-made EVs were based on incorrect calculations. She added that the decision was unfair.
“Politicians should stay away from tariffs, adding more cost to auto manufacturing and confusing the auto industry,” she said, in comments reported by Reuters from the Paris Motor Show.
Last month Chinese EV maker Nio’s CEO and founder William Li also criticized the EU tariffs, saying on a company earnings call that the duties were “unreasonable” and go against the “sustainable development of all humankind.”
The U.S. has also expressed concerns over the influence China has on the EV market. In May, the Biden administration introduced a 100% tariff on Chinese-made electric vehicle imports to the U.S.
Among the top concerns the Biden administration has expressed about China’s EV industry is that it’s helping companies overproduce cheap clean energy vehicles that outpace domestic demand, effectively distorting the market.
In response to the EU tariffs, the China Chamber of Commerce to the EU has previously expressed “deep disappointment” with what it called the bloc’s “adoption of protectionist trade measures.”
Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.
Rodin Eckenroth | Filmmagic | Getty Images
Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.
Here’s how the company performed in comparison with LSEG consensus:
- Earnings per share: $2.50 adjusted vs. $2.35 expected
- Revenue: $3.28 billion vs. $3.14 billion
Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.
While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.
Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.
For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.
Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.
“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”
Better outcomes are a few quarters away, Aujla said.
CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.
At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.
On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.
Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.
On the earnings call, Goodarzi sounded optimistic about the economy.
“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”
WATCH: H&R Block, Intuit shares fall after report Trump administration is considering a free tax-filing app
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