Stellantis is forming an all-encompassing strategic alliance with Leapmotor, a Chinese electric vehicle (EV) firm founded in 2015. Last year, Leapmotor sold around 111,000 vehicles within the Chinese market.
Stellantis recently disclosed an investment of 1.5 billion euros (approximately $1.6 billion) to acquire a 20% ownership interest in Leapmotor. This investment positions Stellantis as a significant shareholder in the Chinese company, joining other key stakeholders such as Shanghai Electric Group and Sequoia Capital.
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Stellantis and Leapmotor are also establishing a joint venture, to be named Leapmotor International, in which Stellantis will hold a 51% ownership stake. This collaborative venture will oversee the export, sale, and production of Leapmotor vehicles in markets outside of China. Initial exports are planned for the latter half of 2024, with Europe designated as the primary target market.
One of the inaugural models set for export is the Leapmotor C10, an electric crossover vehicle that was first unveiled in September at the 2023 Munich Auto Show.
Statements from Stellantis and Leapmotor CEOs
Both Stellantis and Leapmotor have expressed a willingness to explore additional collaborative opportunities. These could potentially include platform-sharing arrangements and co-development of new vehicle models. This is akin to the previously announced partnership between Volkswagen Group and China’s Xpeng in July.
Carlos Tavares, CEO of Stellantis, commented on the agreement with Leapmotor by stating that he anticipates a consolidation phase among Chinese EV manufacturers in the near future. He expects only a few “efficient and agile” companies to gain a stronghold in the Chinese market, and he identifies Leapmotor as one such contender.
Earlier this year, Tavares also cautioned that European automotive manufacturers face significant competition from their Chinese counterparts, primarily due to China’s lower production costs. Unlike the United States, Europe has not implemented substantial tariffs on vehicles manufactured in China.
Market Trends in China
Foreign automakers are witnessing a decline in their market share in China, a market they once had a strong presence in. This decline is largely attributed to an insufficient range of EV offerings. According to data from the China Association of Automobile Manufacturers, Chinese car companies accounted for 53% of sales in China during the first half of 2023.
Frequently Asked Questions (FAQs) about Stellantis-Leapmotor Partnership
What is the main objective of the strategic alliance between Stellantis and Leapmotor?
The primary aim of the strategic partnership between Stellantis and Leapmotor is to establish a joint venture named Leapmotor International. This venture will oversee the export, sale, and production of Leapmotor’s electric vehicles in markets outside of China. Initial exports are scheduled for the second half of 2024, with Europe identified as the first target market.
How much is Stellantis investing in Leapmotor and what stake will it acquire?
Stellantis is investing 1.5 billion euros (approximately $1.6 billion) to acquire a 20% ownership stake in Leapmotor. This investment will make Stellantis a key shareholder in Leapmotor, alongside other significant stakeholders like Shanghai Electric Group and Sequoia Capital.
What models from Leapmotor are expected to be exported?
One of the first models scheduled for export is the Leapmotor C10, an electric crossover vehicle. This vehicle was first introduced to the public in September at the 2023 Munich Auto Show.
What further collaboration opportunities are being explored by Stellantis and Leapmotor?
Both companies have expressed openness to explore additional collaborative ventures. These could include sharing of platforms and joint development of new vehicle models, similar to arrangements like the one between Volkswagen Group and China’s Xpeng.
What did Stellantis CEO Carlos Tavares say about the future of Chinese EV manufacturers?
Carlos Tavares, the CEO of Stellantis, commented that he anticipates a consolidation among Chinese EV brands in the coming years. He expects only a few “efficient and agile” companies to dominate the Chinese market, one of which he believes will be Leapmotor.
How are foreign automakers faring in the Chinese market according to current trends?
Foreign automakers are losing market share in China, largely due to an insufficient range of electric vehicle offerings. According to the China Association of Automobile Manufacturers, Chinese car companies accounted for 53% of all vehicle sales in China in the first half of 2023.
Are there any trade tariffs affecting the competition between European and Chinese automakers?
Unlike the United States, which has implemented substantial tariffs on vehicles imported from China, Europe has not levied steep tariffs on Chinese-built cars. This has been identified as one of the challenges European automakers face when competing with Chinese manufacturers, according to Stellantis CEO Carlos Tavares.
More about Stellantis-Leapmotor Partnership
- Stellantis Official Announcement on Leapmotor Partnership
- Leapmotor Company Profile
- 2023 Munich Auto Show Highlights
- China Association of Automobile Manufacturers Sales Report
- Previous Collaborations in the Automotive Industry: Volkswagen and Xpeng Partnership
- Carlos Tavares Discusses Challenges for European Automakers
- Trade Tariffs on Automobiles: A Global Perspective