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Stellantis takes on China budget EVs with Leapmotor sales in Europe

May 15, 2024
in Business
Stellantis takes on China budget EVs with Leapmotor sales in Europe
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HANGZHOU, China (Reuters) -Stellantis will take on China’s budget electric vehicle (EV) players in Europe with two models from Chinese joint venture (JV) partner Leapmotor (HK:) starting in September and other regions to follow this year.

A European network of 200 dealerships by the end of the year is expected to expand to 500 sales points by 2026, the automaker said.

Sales will begin with Leapmotor’s T03 compact city car and C10 medium-sized SUV but the venture aims to offer at least one new Leapmotor model annually over the next three years for overseas markets.

“We do not intend to leave the 20,000 euro price band of the market to our Chinese competitors,” Tavares said on Tuesday. “You can expect the (Leapmotor) T03 would be priced below 20,000 euros in Europe”.

Chinese EV giant BYD (SZ:) has plans to launch its Seagull model in Europe for less than 20,000 euros.

BYD is among a number of Chinese manufacturers, including Chery and Dongfeng, planning or considering manufacturing in Europe.

While Western automakers have created several joint ventures with peers in China to enter the market there, the Stellantis-Leapmotor partnership is the first one designed to sell and produce EVs from a Chinese manufacturer outside China.

The JV “enables us to accelerate the way to go to market with smart and affordable EVs,” Tavares said on Tuesday at an official launch with Leapmotor founder and CEO Zhu Jiangming.

Leapmotor International is 51%-owned by Stellantis (NYSE:) and will sell EVs in nine European countries including Germany, France, Italy, Spain and the Netherlands, Tavares said.

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It comes at a time trade tensions are running high between China and the European Union, which is investigating whether Chinese EV makers benefit from unfair government subsidies.

The JV will target South America, Middle East and Africa, and the India-Asia Pacific regions from the fourth quarter of 2024.

It has no plans to sell or manufacture cars in the U.S., a spokesman for Stellantis said.

The JV is part of a wider partnership between the two groups which saw Stellantis announce last year that it was buying a 21% stake in Leapmotor in a $1.6 billion deal.

It gives Stellantis exclusive rights to build, export and sell Leapmotor products outside China.

The two companies did not provide details about exactly where the Leapmotor EVs would be built in Europe.

Tavares however said Stellantis’ Tychy plant in Poland could be a possibility.

Stellantis has already picked Tychy as production facility for Leapmotor EVs in Europe, sources have told Reuters.

The automaker has 14 brands including Peugeot (OTC:), Jeep, Fiat and Ram and has often referred to Leapmotor as its 15th one.

($1=0.9265 euros)

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