Stellantis unveils 1.5 bln euros investment in China's EV maker Leapmotor

Credit: Reuters

Caption: Stellantis Chief Executive Officer Carlos Tavares and Leapmotor Chief Executive Officer Zhu Jiangming attend a press conference in Hangzhou, Zhejiang province, China October 26.

Stellantis, a multinational auto company headquartered in Amsterdam, the Netherlands, has announced a plan to invest about 1.5 billion euros (US$1.59 billion) to acquire 20 percent of the shares of Leapmotor, a Chinese maker of electric cars.

In addition, the second-largest auto company in Europe also announced the establishment of a global strategic partnership with Leapmotor and plans to establish an international joint venture.

The deal, which was formally announced by Stellantis and Leapmotor on Thursday, outlines the formation of Leapmotor International, a 51/49 Stellantis-led joint venture that gives Stellantis "exclusive rights for the export and sale, as well as manufacturing, of Leapmotor products outside Greater China."

"The partnership aims to further boost Leapmotor's sales in China, the biggest market in the world, while leveraging Stellantis' established global commercial presence to significantly accelerate Leapmotor brand sales in other regions, starting with Europe," Stellantis said in a press release. The joint venture expects to begin shipments in the second half of 2024.

It described Leapmotor as one of China's fastest-growing "pure-play new energy vehicles (NEVs) tech leaders with a unique vertical integration model and full-suite of in-house R&D and manufacturing capabilities."

With their global strategic partnership, the two parties will leverage their advantages to create highly competitive and efficient electric vehicle travel solutions in China and around the world, it said.

"We feel it's the perfect time to take a leading role in supporting the global expansion plans of Leapmotor, one of the most impressive new EV players who have a similar tech-first, entrepreneurial mindset to ours," Stellantis CEO Carlos Tavares said.

"Through this strategic investment, we can address a white space in our business model and benefit from Leapmotor's competitiveness both in China and abroad," he added.

Stellantis Group was established in early 2021 by the merger of Italian and American conglomerates Fiat Chrysler Automobiles N.V. (FCA) and French PSA Group. It owns brands such as Chrysler, Citroen, Fiat, Jeep, Maserati, and Opel. As of 2022, the group has become the fourth-largest automaker in the world and the second-largest in Europe.