XPeng Inc. announced a strategic partnership with EP Manufacturing Berhad to launch localized production of its G6 SUV and X9 MPV in Malacca, Malaysia, with mass production slated to begin in 2026.
The joint venture leverages EP Manufacturing’s four‑decade experience as a Tier‑1 supplier and its existing assembly plant, while XPeng contributes its AI‑driven vehicle designs and physical‑AI platform. The collaboration is designed to cut logistics costs, shorten delivery times, and allow the company to tailor vehicles to ASEAN preferences.
The expansion aligns with Malaysia’s green‑economy incentives, including tax exemptions for locally assembled EVs through 2027, and fits XPeng’s “local‑for‑local” strategy that has already produced plants in Indonesia and Austria.
XPeng’s move follows a strong Q3 2025 earnings report that saw revenue rise 4% YoY to $2.89 billion and gross margin exceed 20% for the first time, driven by high‑margin services and a shift toward the G6 and X9 models. Management highlighted that the new facility will help sustain momentum and capture growing demand in Southeast Asia.
Analysts noted that the partnership signals XPeng’s confidence in its AI‑driven platform and its ability to scale production without heavy capital outlays, while the Malaysian tax incentives reduce the cost of local assembly. The facility is expected to create skilled jobs and position XPeng as a competitive player in the ASEAN EV market.
The announcement underscores XPeng’s broader strategy to become a global AI‑driven mobility company, integrating its physical‑AI platform across vehicles, robotics, and future mobility solutions. The Malaysian plant will serve as a key hub for the region and a testbed for localized AI integration.
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