This Chinese EV maker is up for a battle with Elon Musk in China

• Chinese EV startup Xpeng is relishing the prospect of testing its tech against Tesla.
• Like other Chinese EV companies, Xpeng is blocked from entering the US market by tariffs.

One of Tesla's biggest Chinese rivals is welcoming the prospect of a tech battle with the automaker after being blocked from the US by punishing tariffs.

Speaking at a roundtable at the Paris Motor Show on Monday, Xpeng co-president Brian Gu said the Guangzhou-based EV startup, one of many competing with Tesla in China, was keen to see how its autonomous driving technology shapes up to Elon Musk's.

"It is good news for us. You need competition to expand the field ... We obviously cannot go to the US at the moment to compete or compare there," the Xpeng executive said.

"But if they are in China, we can compete side by side and learn from them, and they can learn from us and help the market. It's a bigger pie for all of us to enjoy," he added.

Tesla is reportedly close to getting the green light to sell its Full-Self-Driving technologies in China. The company says it plans to launch the feature in the region in Q1 2025 pending regulatory approval.

It will face brutal competition in China, with many EV makers marketing their own autonomous driving systems.

Xpeng's City Navigation Guided Pilot (NGP) system is available throughout China, for example.

Like Tesla's full self-driving, NGP can overtake, recognize traffic signals, and conduct lane changes.

Tariff troubles

Along with China's EV giants, Xpeng has been effectively blocked from selling its electric vehicles in the US by tariffs.

President Joe Biden announced a 100% levy on China-made EVs in May, in an attempt to protect the US auto industry from a wave of cheap Chinese electric cars.

Xpeng and its rivals are facing tariffs in the EU, which voted to impose additional levies of up to 35.3% on Chinese automakers earlier this month.

"I think that the tariff will put a lot of pressure on our business model. It's a direct hit on our margin, which is already not very high," said Gu.

He added that the levies may impact Xpeng's product strategy and pricing in the region, and said the company was considering whether to to set up manufacturing operations in Europe.

"As a global company, we need to learn how to deal with it. The bottom line is that we view Europe as a long-term opportunity and commitment," Gu added.

Xpeng has enjoyed booming sales in China's red-hot EV market in recent months, posting record monthly deliveries in September.

The automaker, known for its side ventures into flying cars and humanoid robots, has also unveiled a series of aggressively priced smart cars in recent months that directly target Tesla's lineup.

That includes the Mona M03, an EV priced at around half the cost of Tesla's Model 3 in China, and the P7+, an electric sedan with AI and autonomous driving features.

Speaking at the Paris Motor Show, Xpeng CEO He Xiaopeng announced that the P7+, which goes on sale in China in November, will start at 209,800 ($29,600).

That also undercuts the price of the Model 3, with Tesla's cheapest vehicle in China starting at 231,900 yuan ($32,700).