Stellantis' $1.6bn Investment in Leapmotor

author: FutureCar Staff    

Stellantis, a multinational automotive manufacturing corporation, has announced its acquisition of a 21% stake in Chinese electric vehicle (EV) manufacturer Leapmotor in a $1.6 billion deal. This move comes as legacy car manufacturers, like Stellantis, transition to EVs and seek to secure access to the Chinese automotive sector.

China has set a goal for neighbourhood electric vehicles (NEVs) to account for 25% of its auto sales by 2025, according to research from GlobalData's Thematic Report: Electric Vehicles. In 2020, China accounted for nearly 38% of global EV sales, reflecting the country's high demand for transportation as the most populous nation.

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 recently made strategic deals to expand its sales and manufacturing worldwide. For example, it plans to increase EV production to 100,000 units in India over the next few years.

BYD has also signed dealerships in the UK and within the EU to expand its sales capacity. Sales of BYD new energy vehicles nearly doubled in June 2023 compared to the previous year, reaching 253,046 units. In the first half of 2023, the company's shipments reached 1.2 million units.

Chinese EV manufacturers, including BYD and Nio, are seeking to expand overseas to diversify amid growing domestic competition. In August, China's auto exports increased by 31% as these manufacturers expand their presence in international markets.

European legacy manufacturers are concerned about the emerging competition from Chinese EVs. The European Commission launched an anti-subsidy investigation in September to determine whether to impose punitive tariffs on cheaper Chinese electric vehicle imports that are threatening European Union manufacturers. The investigation will evaluate the need for tariffs above the current EU standard of 10% for cars.

EC president Ursula von der Leyen expressed concerns about the flooding of global markets with cheaper Chinese electric cars, which are kept artificially low in price due to substantial state subsidies. She stated that this distortion of the market prompted the need for action.

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FutureCar Staff