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.”
The logo of an Apple Store is seen reflected on the glass exterior of a Samsung flagship store in Shanghai, China Monday, Oct. 20, 2025.
Wang Gang | Feature China | Future Publishing | Getty Images
A shortage of memory chips fueled by artificial intelligence players is likely to cause a price rise in smartphones in 2026 and a drop in shipments, Counterpoint Research said in a note on Tuesday.
Smartphone shipments could fall 2.1% in 2026, according to Counterpoint, versus a previous outlook of flat-to-positive growth.
Shipments do not equate to sales but are a measure of demand as they track the number of devices being sent to sales channels like stores.
Meanwhile, the average selling price of smartphones could jump 6.9% year-on-year in 2026, Counterpoint said, in comparison to a previous forecast of a 3.6% rise.
This is being driven by specific chip shortages and bottlenecks in the semiconductor supply chain, which are pushing up component prices.
The continued build-out of data centres globally has hiked demand for systems developed by Nvidia, which in turn uses components designed by SK Hynix and Samsung — the two biggest suppliers of so-called memory chips.
However, a specific component called dynamic random-access memory or DRAM, which is used in AI data centers, is also critical for smartphones. DRAM prices have surged this year as demand outstrips supply.
For low-end smartphones priced below $200, the bill of materials cost has increased 20% to 30% since the beginning of the year, Counterpoint said. The bill of materials is the cost of producing a single smartphone.
The mid and high-end smartphone segment has seen material costs rise 10% to 15%.
“Memory prices could rise another 40% through Q2 2026, resulting in BoM costs increasing anywhere between 8% and over 15% above current elevated levels,” Counterpoint said.
The rising price of components could be passed on to consumers and that will in turn, drive the rise in the average selling price.
“Apple and Samsung are best positioned to weather the next few quarters,” MS Hwang, research director at Counterpoint, said in the note. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins.”
Hwang said this will “play out especially” with Chinese smartphone makers who are in the mid-to-lower end of the market.
Counterpoint said some companies may downgrade components like camera modules, displays and even audio, as well as reusing old components. Smartphone players are likely to try to incentivize consumers to buy their higher-priced devices too.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024