As the electric vehicle (EV) landscape undergoes rapid transformation, China’s XPeng Motors is staking a major claim on Southeast Asia’s future. With the launch of its first overseas manufacturing facility in Indonesia, XPeng isn’t just expanding internationally, it’s establishing a strategic foothold in one of the world’s most promising EV growth markets.
From cutting production costs to tapping into a rising consumer base, XPeng’s move could redefine the competitive dynamics in the global EV race. Here’s why this expansion matters and what it signals about the company’s long-term play for global leadership.
In December 2024, XPeng signed a landmark memorandum of understanding with Indonesia’s Erajaya Active Lifestyle (ERAL), granting the latter exclusive distribution rights across the country. This partnership gave XPeng instant access to ERAL’s premium retail network and deep market knowledge, key assets in a fast-moving consumer landscape.
Fast forward to July 2025, and XPeng’s manufacturing hub in Cikarang, Jakarta has begun assembling right-hand-drive versions of its flagship X9 (a luxurious 7-seater MPV) and the mid-sized G6 SUV. The facility isn’t just producing cars, it’s reducing tariff exposure, shortening supply chains, and bringing the brand closer to consumers.
Industry analysts estimate that local assembly in Indonesia could slash XPeng’s per-unit costs by up to 20%, dramatically improving margins while keeping vehicles competitively priced. The X9, targeting affluent families and tech-forward drivers, is priced at IDR 990 million (~RM285,000), while the G6 starts at IDR 599 million (~RM155,000), offering broad appeal without compromising on innovation.
Indonesia isn’t just another market, it’s a launchpad for XPeng’s regional dominance. With a population exceeding 270 million and a government committed to electrifying its roads (targeting 2 million EVs by 2030), Indonesia represents both scale and urgency.
EV sales in the country jumped 150% in 2024, fueled by generous government incentives and the country’s ambition to harness its own lithium and nickel reserves for battery production. XPeng’s localized strategy allows it to stay agile, avoid import bottlenecks, and meet evolving consumer needs faster than export-reliant rivals.
The X9’s spacious design and built-in AI driving features, such as XPeng’s XNGP semi-autonomous navigation, are tailored for Indonesia’s dense urban centres and family-oriented demographics. Meanwhile, the G6 boasts 5C ultra-fast charging (10% to 80% in just five minutes), addressing concerns in a region where public charging infrastructure remains in development.
XPeng’s Q1 2025 performance offers compelling validation of its international strategy. The company delivered 94,008 vehicles, a staggering 331% year-on-year increase, with exports climbing 370% to 7,615 units. While specific sales data from Indonesia has yet to be released, these export trends suggest that emerging markets are driving significant growth.
Revenue for Q1 hit RMB 15.81 billion, up 141% YoY, with gross margins at a record 15.6%. Cash reserves surged to RMB 45.28 billion, up RMB 3.3 billion from the previous quarter, a testament to XPeng’s improving operational efficiency.
Looking ahead, the company projects Q2 deliveries between 102,000 and 108,000 units, with revenue forecasts of RMB 18.1 billion (+122% YoY). Most notably, XPeng expects to achieve quarterly profitability and positive free cash flow by year-end, an ambitious milestone that would distinguish it from peers like NIO and Li Auto.
XPeng’s ambitions go well beyond Indonesian borders. By the end of 2025, the company plans to be present in over 60 global markets. The new Indonesian plant is just the first step in a broader Southeast Asian expansion that includes Thailand, Malaysia, and Vietnam.
At the core of XPeng’s value proposition is its deep investment in AI and autonomous tech. The company’s in-house Turing chip, which reportedly triples the performance of NVIDIA’s Orin-X, underscores its strategy of vertical integration and tech differentiation. XPeng is also developing IRON, a humanoid robot slated for mass production in 2026, further showcasing its ambitions to lead not just in EVs, but in intelligent mobility solutions at large.
XPeng’s shares have lagged behind some of its competitors in 2025, but the company’s expansion into Indonesia could be a turning point. Its compelling mix of cost efficiency, market timing, and tech leadership positions it as a front-runner in the global EV sector.
Investment Highlights:
- Buy on dips: XPeng’s fundamentals are improving, and Indonesian momentum could drive revaluation.
- Watch for Q2 data: Confirmation of strong sales from Southeast Asia may trigger a positive market response.
- Hold for the long term: XPeng’s localisation model, AI edge, and global ambitions make it a standout in any forward-looking EV portfolio.
XPeng’s Indonesian venture isn’t just about building cars, it’s about building an international ecosystem. As governments push for green mobility, and consumers demand smarter, more affordable vehicles, XPeng’s localised, tech-driven strategy is ticking every box.
With the EV market still in its early innings, projected to surpass $1 trillion globally, XPeng’s early investments in Indonesia could yield massive returns, both on the balance sheet and in long-term market share. For investors and industry watchers alike, this is a story worth following closely.