Stellantis Leapmotor production could soon become a reality in Europe and North America, according to recent statements made by Stellantis CEO, Carlos Tavares. The multinational automotive corporation is reportedly pondering the manufacture of up to 150,000 low-cost EVs annually in Italy, in collaboration with its Chinese partner Leapmotor.
This move follows Stellantis becoming a strategic shareholder of Leapmotor, with a €1.5 billion investment aimed at bolstering Leapmotor’s global electric vehicle business. Leveraging Leapmotor’s cost-efficient EV ecosystem in China, Stellantis aims to fulfill the core goals of its Dare Forward 2030 plan.
Image Description: Stellantis CEO Carlos Tavares & Leapmotor Co-Founder Jiangming Zhu during the Stellantis & Leapmotor strategic cooperation signing ceremony in Hangzhou, China, on October 26, 2023. (Image Source: Stellantis Website)
The strategic partnership between Stellantis and Leapmotor, announced four months ago, appears to be deepening. There are reports that Stellantis is contemplating the manufacturing of Chinese EVs in Europe, a decision that could significantly impact the EV market.
Tavares has revealed plans to potentially manufacture electric vehicles utilizing technology from Chinese partner Leapmotor. Stellantis’s decision to buy a 21% stake in EV maker Zhejiang Leapmotor could position Stellantis as a leader in the global EV industry.
The company is also evaluating the option of building Leapmotor EVs at the Mirafiori complex in Turin, with potential production beginning from 2026 or 2027, aiming for 150,000 low-cost electric vehicles annually.
The Possible Setbacks
Tavares highlighted the possibility of Western governments blocking Chinese exports.
“At one point in time, Western governments may be tempted to block Chinese exports,” Tavares stated. “We have the opportunity to assemble Leapmotor cars inside the bubble. It could be Europe it could be North America.”
“any country that has a Stellantis plant” could build Leapmotor vehicles locally, he added.
The automotive industry faces pressure to reduce EV costs, which Tavares believes will lead to consolidation among automakers. Despite the industry’s competitive landscape, Tavares mentioned Stellantis is not pursuing significant deals at the moment. “We have enough on our plate,” he remarked, following recent denials of rumors regarding a merger with Renault.
The Future of EVs
Tavares predicts a future with fewer major automakers, possibly down to five. This consolidation is seen as necessary to compete with Chinese giants like BYD. The challenge, according to Tavares, is to sell EVs at the same price as vehicles with internal combustion engines (ICE) while still making a profit. He pointed out that Chinese EV manufacturers, including BYD, have a 30% production cost advantage over Western companies.
The CEO dismissed tariffs as a solution to the cost disparity. He also raised concerns about Chinese automakers building factories in Mexico to export vehicles to the U.S. This situation, Tavares suggested, could put the U.S. in a difficult position regarding the U.S.-Mexico-Canada trade agreement and impact Mexican workers.
With the possibility of Stellantis Leapmotor production in Europe and North America, the multinational automotive manufacturing corporation is well-positioned to make a significant contribution to the global EV market. The company’s strategic decisions signal a commitment to affordable and efficient electric vehicles, furthering the transition towards sustainable transportation.
Image Source: Stellantis
