Stellantis considers potential Chinese EV collaboration

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【Summary】Stellantis, the owner of Jeep and Ram, is considering a partnership with a Chinese EV maker to strengthen its brand in China. This follows in the footsteps of Volkswagen, who recently partnered with Chinese EV maker Zhejiang Leapmotor Technologies. Stellantis is exploring alliances in China to expand in the world's largest EV market. The company may invest in a Chinese EV maker or form a business partnership.

FutureCar Staff Aug 23, 2023 9:14 AM PT

Stellantis considers potential Chinese EV collaboration

Stellantis, the owner of Jeep and Ram, is considering a partnership with a Chinese EV maker in a move that follows in the footsteps of Volkswagen. The goal is to strengthen Stellantis' brand in the Chinese market by utilizing an EV platform from China.

According to Bloomberg, sources familiar with the matter revealed that Stellantis is exploring alliances in China to expand its brand in the world's largest EV market. One potential partner being considered is Zhejiang Leapmotor Technologies (Leapmotor). This news comes shortly after reports of Volkswagen negotiating with Leapmotor to acquire a certain generation of its EV platform for its Jetta brand.

The local report suggests that the partnership between Volkswagen and Leapmotor would be more similar to the Audi-SAIC tie-up rather than the XPeng deal. In July, Volkswagen invested $700 million for a 4.99% stake in XPeng and will utilize XPeng's Edward platform to launch two new electric models. Audi, on the other hand, confirmed a partnership with Chinese state-owned SAIC to accelerate EV development in the region.

Stellantis is considering various options, including investing in a Chinese EV maker or forming a business partnership to expand its brand in the region. However, Stellantis and Volkswagen declined to comment, while Leapmotor has not responded immediately.

After closing its only Jeep factory in China last year, Stellantis CEO Carlos Tavares adopted an "asset-light" strategy, similar to rivals Volkswagen and GM, who have lost market share to domestic EV makers. Stellantis currently has a joint venture with Dongfeng Motor Group in China, selling Peugeot and Citroen cars, but the company may be looking to further expand its presence through a new partnership.

China is the largest EV market globally, with over 535,000 battery electric vehicles sold in June alone, according to data from the China Association of Automobile Manufacturers (CAAM). From January to June, the region saw a total of 2.55 million EVs sold. Leading global automakers, including Volkswagen, heavily rely on China for a significant portion of their revenue.

As EV makers like BYD and Tesla continue to gain market share, automakers such as VW, Toyota, GM, and now Stellantis are recognizing the urgency to keep up. Failure to do so could result in being squeezed out of the market. Partnering with local automakers and suppliers not only speeds up EV development in the region but also caters to the unique needs of the Chinese market.