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A Chinese electric vehicle start-up backed by Volkswagen has suspended a senior executive over alleged corruption.
Xpeng said that Li Feng, a vice-president who oversaw supply chain procurement, was suspended after an internal investigation but the Tesla rival gave no further details of the allegations.
“This incident has had limited impact and will not disrupt our business or production processes,” Xpeng told the Financial Times on Wednesday, adding that it has a “strict stance” against corruption.
Xpeng, which is listed in New York and Hong Kong, is one of China’s fastest growing electric vehicle companies and is considered by analysts to be a potential future challenger to Elon Musk’s Tesla and its Chinese competitor BYD, which is backed by Warren Buffett.
VW and Xpeng announced a partnership in late July. VW said it would invest $700mn in the group, giving it a 5 per cent stake in the Guangzhou-based EV maker as well as a seat as an “observer” on its board.
A spokesperson for VW in China said the allegation was “an internal matter” for the Chinese group. “We do not expect any impact on our partnership or joint projects,” he said. VW declined to comment further.
The executive suspension at Xpeng takes place at a time of intense competition in the Chinese car market, which is the world’s largest.
Since Tesla sparked a price war in the country last year, scores of companies — both established foreign players and local newcomers — have been hit by declining sales, excess manufacturing capacity and rising expectations of industry consolidation.
Xpeng sold 66,133 EVs in the first nine months of the year, down from 98,553 in the same period last year and significantly less than rival BYD, which sold 1.07mn pure battery electric vehicles during the same period.
Exports of Chinese-made EVs are rising and the country is on track to become the world’s biggest car exporter this year, overtaking Japan.
The EU has moved against China’s electric carmakers in a bid to shield European companies before they are priced out by Chinese rivals.
China’s exports of so-called “new energy” vehicles, which include electric cars and plug-in hybrids, jumped 107 per cent in September from a year earlier to 91,000 units, to account for 25.4 per cent of the country’s total passenger car exports, according to data released on Wednesday from the China Passenger Car Association.
In August, Xpeng bought ride-hailing group Didi’s smart EV business for $744mn. As part of that deal, Xpeng is expected to partner with the company in growth areas, including robotaxis.
Xpeng’s Hong Kong-traded shares edged higher on Wednesday after closing nearly 5 per cent lower on Tuesday following Chinese media reports of the probe.
