Update: Added comments from Xpeng spokesperson and adjusted the headline.

The setback regarding the P5 does not affect Xpeng's long-term strategy in Europe, where it is moving to encourage local consumers to pre-order the P7 sedan.

(Image credit: CnEVPost)

Xpeng Motors (NYSE: XPEV, HKG: 9868) is halting P5 reservations in Europe, just three months after the sedan opened for bookings there, marking the latest setback in its European expansion.

Xpeng announced that it has suspended all P5 reservations and pre-orders in four European countries and will shift its focus to the P7 sedan, citing foreseeable export timeline issues.

This setback regarding the P5 does not affect its long-term strategy in Europe or its intention to establish a local presence in the countries where it currently operates, an Xpeng spokesperson told CnEVPost, adding that the automaker is shifting to encouraging European consumers to book the P7 sedan.

Electrek first reported the development earlier today.

"As we are all aware, the global supply chain issues have been impacting the automotive industry for many months. Many auto brands had to adjust their production and delivery timeline -- as well as pricing -- in order to mitigate these challenges and uncertainty," said the Xpeng spokesperson.

"We expect some of these challenges will persist. Our latest assessment is that the previously indicated delivery time for the P5 in Europe may no longer be achievable, as a result of some of these challenges," the spokesperson said.

For those customers who have pre-ordered the P5, Xpeng is actively communicating with them about the uncertainty of the schedule.

Xpeng officially launched the P5, the company's third production vehicle, in China on September 15, 2021, and features two LiDARs on the model's premium version, making it one of the first production vehicles to use LiDARs in the global market.

On March 10 of this year, Xpeng allowed local consumers to reserve the P5 sedan in Denmark, the Netherlands, Norway and Sweden.

The company previously offered the G3 series SUV as well as the P7 sedan in Norway, this was the first time the P5 has joined the export ranks.

Xpeng also announced at the time the opening of its first local experience store in the Netherlands, the second Xpeng-branded showroom in Europe. In February, Xpeng opened its first experience store in Europe in Sweden.

In all four European countries, the process for users to book P5 is completely electronic, and they can do so on Xpeng's official website or mobile app in each country.

It is worth noting, however, that Xpeng did not announce the pre-order prices of the P5 in Europe at the time, and they were not known until the end of April.

Xpeng P5 pre-orders start at DKK 390,000 ($57,040) in Denmark, €48,000 ($52,250) in the Netherlands, NOK 380,000 ($43,190) in Norway and SEK 550,000 ($58,380) in Sweden, according to the company's announcement on April 21.

It's also worth noting that on May 26, local Chinese tech media outlet LatePost reported that Xpeng was undergoing a management restructuring and that overseas expansion was on hold.

Xpeng launched its strategy to enter overseas markets in 2020, with Norway as the first stop, and opened direct stores in Sweden, the Netherlands, and Denmark in February this year.

In 2020, Xpeng delivered 100 Xpeng G3 SUVs in Norway. In 2021, it saw a total of 438 deliveries of G3s and P7s, LatePost noted.

The performance is dismal, as Norway saw 176,300 vehicle sales in 2021, 65 percent of which are purely electric, with Tesla delivering more than 20,000, according to the report, citing the Norwegian Road Federation (NRF).

Sales and orders for the Xpeng G3, P7 and P5 were lackluster in Europe, and the upcoming deliveries of the G9 SUV will also be prioritized to Chinese consumers due to supply chain issues, according to LatePost.

The Xpeng G9 was unveiled on November 19 last year during the Guangzhou auto show, the fourth model of Xpeng.

In February, local media reported that Xpeng will start small deliveries of the G9 at the end of August at the earliest, while large deliveries will start in September.

Xpeng delivered 10,125 vehicles in May, including 4,224 P7 sedans, 3,686 P5 sedans, and 2,215 G3 series compact SUVs.

Since deliveries began last September, the P5 has accumulated 25,601 deliveries in China, according to data monitored by CnEVPost.