Stellantis' $1.6bn Investment in Leapmotor

author: FutureCar Staff    

Stellantis, a multinational automotive manufacturing corporation, has announced its plans to purchase a 21% stake in Chinese electric vehicle (EV) manufacturer Leapmotor for $1.6 billion. This move comes as legacy car manufacturers, like Stellantis, are transitioning to EVs and seeking to gain access to the Chinese automotive sector. By investing in Leapmotor, Stellantis aims to update its own manufacturing tools and expand its presence in the Chinese EV market.

China has set a target for neighborhood electric vehicles (NEVs) to account for 25% of its auto sales by 2025, according to research from GlobalData. In 2020, China already accounted for nearly 38% of global EV sales, reflecting its high demand for transportation as the most populous country in the world. Chinese EV manufacturers, such as BYD, have benefited from robust domestic lithium-ion battery production and government subsidies.

BYD, a conglomerate specializing in technology for transport, renewable energy, and electronics, has been making strategic deals to expand its sales and manufacturing globally. It recently announced plans to increase EV production to 100,000 units in India over the next few years. Additionally, BYD has signed dealership agreements in the UK and EU to further expand its sales capacity.

Chinese EV manufacturers, including BYD and Nio, are looking to diversify and expand overseas due to growing domestic competition. In August, China's auto exports increased by 31%, driven by the expansion efforts of these EV manufacturers. This has raised concerns among European legacy manufacturers, leading the European Commission to launch an anti-subsidy investigation. The investigation will determine whether punitive tariffs should be imposed on cheaper Chinese EV imports that are threatening European Union manufacturers.

The European Commission will evaluate the situation for up to 13 months and may consider tariffs above the current EU standard of 10% for cars. EC President Ursula von der Leyen has expressed concern about the distortion of the market caused by the flood of cheaper Chinese electric cars, which are kept affordable through significant state subsidies.

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FutureCar Staff