Chinese electric vehicle (EV) maker Xpeng Motors’ plan to double production capacity at its Zhaoqing plant in Guangdong, which may lead to over 100 suppliers locating themselves in the city, according to the companies vice chairman, reported the South China Morning Post.
Component suppliers will establish production facilities in districts neighboring Xpeng’s factory in the next two years to reap cost savings and efficiency gains as the EV maker’s capacity expands, Xpeng VC Brian Gu told the South China Morning Post.
“As our production scale grows beyond a certain level, their logistics costs will start to outweigh the costs of setting up shop near us,” he said.
Xpeng is one of a number of new brand EV automakers that have sprung up in the past few years and are challenging traditional automakers. First in China and potentially globally.