Last week, Stellantis and Leapmotor announced a long-term partnership and the creation of a joint venture, Leapmotor International, to sell Chinese electric vehicles outside of China. The goals are very ambitious — to reach a sales level of 500,000 cars by 2030; Leapmotor electric cars will appear in Europe next year.
The deal between Stellantis and Leapmotor is unique in its kind: for the first time, a Western auto giant is entering into a joint venture with a Chinese company not to develop its business in China, but to promote Chinese cars in foreign markets. Let us recall that Stellantis will invest 1.5 billion euros in Leapmotor, will become the owner of 20% of the shares of the Chinese company and will receive two seats on its board of directors (these directors have already been appointed, they are experienced managers Gregoire Olivier and Doug Ostermann).
< p>It is not yet clear how the deal will affect the deplorable situation of Stellantis’ own brands in China; this is not the main thing now. The main thing is the launch of the Leapmotor International joint venture with headquarters in the Netherlands. A controlling stake (51%) of Leapmotor International shares will belong to Stellantis, and the CEO will also be appointed by Stellantis. Leapmotor International will have exclusive rights to export, sell and manufacture Leapmotor models outside of the so-called Greater China region (which includes Hong Kong, Macau and Taiwan). There are no specific plans for organizing the production of Leapmotor electric vehicles outside of China yet, but they could be quickly concocted if, for example, Europe begins to fence itself off from imported Chinese “electric cars” with high duties and other administrative methods.
In the latest Stellantis report for investors it is said that the corporation wants to sell 500,000 Leapmotor electric vehicles outside of China — this level is planned to be reached by 2030. The debut market will be Europe, with the Leapmotor brand appearing here late next year. Which markets will be next has not yet been announced.
Stellantis CFO Natalie Knight, quoted by Automotive News Europe, called Leapmotor the fifteenth brand in the corporation's portfolio. The remaining fourteen are, recall, Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. By the end of this year, sales of Stellantis’ own electric vehicles in the world may exceed 300,000 units. Leapmotor will stand apart from other brands; they will not receive the Leapmotor platform and will develop within the framework of their own four-platform plan announced in 2021, recently supplemented by a fifth, budget platform.
The compact coupe S01 became the first production model of Leapmotor
Leapmotor is considered one of the most successful and promising Chinese startups; it was founded in 2015 by electronics engineer Zhu Jiangming. The first Leapmotor model was put into production in 2019, now there are four models in the range, all of them were initially electric, the most popular C11 crossover and C01 sedan (in the main photo) have also recently introduced plug-in hybrid versions, where a gasoline internal combustion engine is used as an electric range extender. In the first ten months of this year, Leapmotor sold 107,029 cars in China (+13.11% compared to last year); in the coming years, the company wants to reach a sales level of one million cars per year in China.
Leapmotor T03
Leapmotor's strengths include a good price/quality balance, its own production of microelectronics (including processors) and high rates of technical evolution: in July of this year, the Chinese company introduced the third generation of its own modular platform Leap 3.0, and by 2025 the fourth will be ready . This raises a reasonable question about Leapmotor's competition with other Stellantis brands that are not developing as quickly. European brands Citroen, Fiat, Opel and Peugeot could suffer from the introduction of Leapmotor and it is unclear how Stellantis management plans to deal with these risks.
Leapmotor C11
It is curious that Leapmotor investors greeted the news of the deal with Stellantis Corporation without enthusiasm: the price of shares of the Chinese company on the Hong Kong stock exchange fell by 26% over the week and only today began to slowly recover . Investors are probably afraid that Western bosses will slow down the development of Leapmotor and it will get lost among other young and rapidly growing Chinese companies.
We add that in July of this year the Volkswagen concern announced the purchase of 4.99 % shares of the Chinese electric vehicle startup Xpeng and will make its own electric vehicles for the Chinese market on its platform, but this cooperation will not extend beyond China. Volkswagen also negotiated with Leapmotor, but the Stellantis offer turned out to be more attractive for the Chinese company.
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