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A Chinese electric car startup backed by Volkswagen has suspended a top executive over alleged corruption.
Xpeng Motors said Li Feng, its vice president in charge of supply chain procurement, had been suspended following an internal investigation, but Tesla rivals did not provide further details about the allegations.
“The impact of this incident will be limited and will not disrupt our business or production processes,” Xpeng Motors told the Financial Times on Wednesday, adding that the company took a “strict stance” against corruption.
New York and Hong Kong-listed Xpeng Motors, one of China’s fastest-growing electric car companies, is viewed by analysts as a successor to Elon Musk’s Tesla and its Warren Buffett-backed A potential future challenger to Chinese rival BYD.
Volkswagen and Xpeng announced their partnership in late July. Volkswagen said it would invest $700 million in the group, taking a 5% stake in the Guangzhou electric vehicle maker and an “observer” seat on its board.
A spokesman for Volkswagen China said the accusation was an “internal matter” for the Chinese group. “We do not anticipate any impact on our partnerships or joint projects,” he said. Volkswagen declined to comment further.
The suspension of top executives at Xpeng Motors comes amid fierce competition in China’s auto market, the world’s largest.
Since Tesla sparked a price war in China last year, dozens of companies – both established foreign players and local newcomers – have been hit by falling sales, overcapacity and rising expectations of industry consolidation.
Xpeng Motors sold 66,133 electric vehicles in the first nine months of this year, down from 98,553 in the same period last year and significantly lower than rival BYD, which sold 1.07 million pure electric vehicles in the same period.
Exports of Chinese-made electric vehicles are rising, and China is expected to overtake Japan this year to become the world’s largest car exporter.
The European Union has taken action against Chinese electric car makers in a bid to protect European companies before they are priced out by Chinese rivals.
In September, China’s exports of so-called “new energy” vehicles, which include electric vehicles and plug-in hybrids, increased 107% year-on-year to 91,000 units, accounting for 25.4% of China’s total passenger car exports. That’s according to data released by the China Passenger Car Association on Wednesday.
In August, Xpeng Motors acquired the smart electric vehicle business of ride-hailing group Didi Chuxing for US$744 million. As part of the deal, Xpeng Motors is expected to work with the company in growth areas including robotaxis.
Xpeng Motors’ Hong Kong-listed shares edged higher on Tuesday after Chinese media informed them of the investigation, before closing down nearly 5% on Tuesday.
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