Stellantis considers manufacturing Leapmotor EVs in Europe and North America

Stellantis has been exploring the option of building electric vehicles based on technology from Chinese affiliate Leapmotor in markets where it needs competitively-priced models to compete with Chinese EV makers, such as Europe, North America, or other locations. Carlos Tavares, the Chief Executive, expressed that Western governments may be tempted to block Chinese exports at some point, and Stellantis has the opportunity to assemble Leapmotor cars in Europe or North America.

Recent reports indicated that Stellantis is considering the production of Leapmotor EVs in Italy. Tavares stated that there’s no reason to exclude any country that has a Stellantis plant, and the company is open to establishing these operations wherever feasible.

Tavares also discussed the pressure to reduce electric vehicle costs, mentioning the possibility of a future consolidation among global automakers. He emphasized the importance of achieving economies of scale to compete with leading Chinese automakers, such as BYD. Tavares acknowledged that BYD and other Chinese EV makers currently possess a 30% production cost advantage over Western automakers, highlighting the need for Western automakers to effectively sell EVs and generate profits to fulfill consumer expectations.

Tavares also addressed the potential impact of tariffs and trade agreements on the automotive industry, stating that protectionist measures will not necessarily aid Western automakers in competing with Chinese counterparts. He highlighted that if Chinese automakers decide to build factories in Mexico for exporting vehicles to the U.S., the Mexican government would welcome the investment. Tavares also pointed out that this situation could pose challenges for U.S. trade policies and potentially impact labor dynamics in Mexico.

In summary, Stellantis is considering strategic options to manufacture electric vehicles using technology from Leapmotor in various regions, anticipating the need to bolster their competitiveness against Chinese EV manufacturers. Meanwhile, Tavares underscored the industry-wide necessity to address production costs and foster international trade partnerships to navigate the evolving landscape of electric vehicle production and sales.