This is getting nasty: TrueEV and XPeng are in Federal Court, as EV distributor alleges “unconscionable conduct”
Vehicle distributor TrueEV has launched legal action against Chinese electric vehicle brand XPeng, alleging it was sidelined after helping establish the marque locally, according to reports published by The Australian and Herald Sun newspapers.
According to the reporting, TrueEV (TEV) has filed proceedings in the Federal Court against Shenzhen Xiaopeng Motors Supply Chain Management, accusing the carmaker of “unconscionable conduct” after terminating an exclusive distribution agreement well before its five-year term expired.
The Australian reports TEV claims it invested heavily to launch XPeng in Australia, establishing a retail and service footprint that included 15 dealerships along with dozens of repairers and service centres.
READ MORE: XPeng’s Australian future unclear as court action initiated and receivers get involved
READ MORE: XPeng’s Australian future unclear as court action initiated and receivers get involved
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The distributor alleges the agreement was effectively torn up after about 18 months, potentially costing it millions.
According to court filings referenced by The Australian, TEV alleges XPeng “kept changing the goalposts” and undertook a series of actions that undermined its operations.
These reportedly included refusing to supply new vehicle models unless the factory-backed XPeng Australia operation was allowed to enter the market directly.
The Herald Sun reports similar claims, including allegations XPeng contacted finance providers linked to TEV and encouraged them to cease funding, while also approaching dealers within TEV’s network to establish direct relationships.
Further claims outlined in The Australian include that XPeng altered approval processes for dealers and service centres beyond the scope of the original agreement, and directed TEV to remove multiple dealers and service partners from official channels, disrupting sales and aftersales support.
TEV argues the conduct breaches Australia’s Competition and Consumer Act, including provisions relating to unconscionable conduct, as well as the Franchising Code of Conduct.
The case is expected to test protections available to local distributors and dealers when global manufacturers shift to direct-sales models.
XPeng, according to The Australian, has argued the local sales and service network would operate more effectively if its own Australian arm also distributed vehicles, a position TEV disputes.
The dispute comes amid broader scrutiny of franchising arrangements in Australia’s automotive sector. The federal government is considering strengthening dealer protections, with Prime Minister Anthony Albanese recently signalling concern about unfair practices affecting local operators.
A trial is scheduled for October.
