US listed Chinese electric vehicle maker Xpeng Inc, plans to set up a third factory in Wuhan, China to meet demand.
They are partnering with the local government of Wuhan to build a factory with an annual vehicle production capacity of 100,000 units. The plant will house power train and research and developments facilities. XPeng didn’t disclose a timeline for commencing production or proposed investment for the new plant
“Smart EVs are booming in popularity in China,” Chairman He Xiaopeng said in the statement. “Expanding our capacity in key hubs like Wuhan plays a critical role.”
XPeng, founded in 2014, has an operational facility in Zhaoqing in Guangdong province and announced its second plant in September in Guangzhou, which is likely to commence production by end of 2022. Each of these plants can make 100,000 units annually, implying XPeng is looking to treble capacity in the coming years.
The new base, announced months after XPeng said it was building a similar-sized plant in Guangzhou, demonstrates the company’s bold bet on Chinese consumers’ growing appetite for EVs after a record of more than 1.3 million units were sold last year.
China is indeed the biggest electric vehicle market in the world. According to the China Association of Automobile Manufacturers (CAAM), sales of battery electric vehicles (BEV) and plug-in hybrids (PHEV) amounted to 1,000,000 and 250,000 in 2020, respectively. That puts China way ahead of Germany (395,000), which overtook the United States in terms of EV sales.
Victor Nnadi is an Independent Economics Researcher and a Securities Trader.
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