The investment will give the manufacturing conglomerate a 20% stake in the business and two seats on the company’s board. As part of the agreement, both brands will launch a joint venture titled Leapmotor International, in which Stellantis will own a 51% share. This subsidiary will serve to drive overseas sales of the electric vehicle maker’s models, which include battery-powered sedans, SUVs and a mini-style car.
The move comes amidst a global effort to compete in China’s car market, where electric vehicles accounted for 37% of sales in Q1 2023. Currently, China’s BYD and America’s Tesla command a majority of the region’s EV segment. Among major automakers, Stellantis has been one of the more cautious brands throughout the electrification shift. Although it was quicker to build EV factories and models than Japanese manufacturers such as Toyota, its leaders have cautioned against abandoning the internal combustion engine too early. Thus, the investment into Leapmotor not only represents a rare partnership between a Chinese EV maker and a foreign manufacturer but also a sudden shift in EV optimism. It also arrives just months after Volkswagen formed a similar alliance with Xpeng.
But while foreign automakers are looking to grow their electric vehicle presence in China, the country’s automakers are also vying for consumers in overseas markets, raising red flags amongst OEMs and lawmakers. Stellantis CEO Carlos Tavares has himself sounded the alarm on the threat of China’s EV industry but dialed back his concerns in a recent visit to the country, according to Reuters. “The Chinese offensive is visible everywhere,” he commented. “With this deal, we can benefit from it rather than being victims of it.”