GAC Partners With Magna to Build AION V EV in Austria Amid EU Tariff Pressures

China’s Guangzhou Automobile Group (GAC) is accelerating its European expansion by partnering with auto manufacturer Magna to produce its electric AION V model in Austria. The companies confirmed that production will take place at Magna’s well-known Graz facility, a move strategically designed to help GAC avoid the European Union’s steep tariffs on China-made electric vehicles. These provisional tariffs, reaching up to 37.6%, were introduced by the EU to counter what it considers unfair subsidies benefiting Chinese EV manufacturers.

By shifting assembly to Europe, GAC positions itself more competitively in a market that is becoming increasingly protective and highly sought after by global automakers. According to Wei Haigang, president of GAC International, Europe represents a crucial region in the company’s broader global growth strategy. Local production not only sidesteps tariff hurdles but also strengthens GAC’s ability to serve European consumers more efficiently.

Magna’s Graz plant is known for its flexible manufacturing capabilities, capable of producing gasoline, hybrid, and electric vehicles on shared production lines. Roland Prettner, president of Magna Steyr’s contract manufacturing division, stated that the company’s long-standing expertise will enable automakers like GAC to localize production smoothly and cost-effectively. The collaboration underscores Magna’s growing role as a key partner for EV brands entering Europe.

This agreement follows Magna’s recent announcement that it will also build electric models for XPeng at the same facility, highlighting Graz as an increasingly important hub for Chinese EV makers seeking access to the European market without tariff burdens.

With rising demand for electric vehicles across Europe and growing regulatory pressure on imported models, GAC’s decision to produce the AION V locally positions the company to compete more effectively while strengthening its global footprint.