XPeng Inc. ( XPEV ) shares are trading lower in the premarket session on Friday.

The company reportedly expressed concerns that new U.S. tariffs on Chinese EVs could impede progress toward carbon neutrality and the green energy transition, Reuters reported.

“It will result in higher costs,” Xpeng ( XPEV ) co-President Brian Gu told media in Hong Kong where the company launched two EV models, Reuters added.

“This has no impact on Xpeng Motors at the moment, but for such a large market as a whole, I hope that in the future it can become more open, allowing global products to enter and compete,” the report noted.

Currently, only a limited number of light-duty vehicles manufactured in China are being imported to the U.S. Gu made these remarks while in Hong Kong, where Xpeng ( XPEV ) has partnered with Malaysia’s Sime Darby Motors to introduce its electric sport utility vehicle, G6, and flagship seven-seater, X9, Reuters added. 

This move signifies Xpeng’s expansion beyond China’s saturated car market. Amid fierce price competition and decreasing demand in China, Chinese car manufacturers are seeking to mitigate losses by accelerating their international expansion efforts, the report noted.

Hong Kong hosts several Chinese EV manufacturers like BYD and Great Wall Motor. 

The market has witnessed a substantial increase in China-made EV models, from one in 2018 to 20 in 2023, as reported by CBRE, indicating robust growth in the region, per Reuters. 

However, their global expansion efforts face challenges, including an EU anti-subsidy investigation into EV imports from China, the largest car market globally, along with recent U.S. tariff escalations.

“What is the flexibility or room for margins that we can have in order to meet changes in tariffs in other regimes,” Gu said, adding that the company is still evaluating the extent of EU tariffs that would prompt it to relocate production overseas, Reuters added.

Price Action: XPEV shares are trading lower by 1.57% to $8.14 premarket at last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors