Dutch multinational automotive manufacturer Stellantis NV announced that if the import tariffs on electric vehicles from China announced by the European Union this week take effect, it will transfer the production of certain models of Leapmotor, a Chinese-made electric vehicle, to Europe.
CEO Carlos Tavares of Stellantis stated late Thursday (June 13) that certain models of Leapmotor might be assembled outside China.
Leapmotor is an electric vehicle manufacturer headquartered in Hangzhou, China. In October 26, 2023, Stellantis Group announced an investment of approximately 1.5 billion euros to acquire about 20% of Leapmotor’s shares and obtained 2 seats on Leapmotor’s board. The two parties also established a joint venture called Leapmotor International, which Stellantis appointed a CEO for, responsible for Leapmotor’s overseas export, sales, and manufacturing operations.
On February 19, Stellantis announced further cooperation with Chinese company Leapmotor and introduced the production of related models in Turin, Italy, with an expected annual production capacity of 150,000 vehicles by 2025 or 2026.
The joint venture aims to launch at least six new models by 2027, targeting mass market buyers.
Tavares mentioned that despite their new partner starting sales in Europe just last September, due to potential additional costs arising from heightened global trade tensions, they may expedite a plan to shift the assembly of certain Leapmotor models from China to other Stellantis plants. Last month, both companies indicated that the electric vehicle model would eventually be produced outside China.
Tavares mentioned on Thursday that the Stellantis plant in Tychy, Poland, where the Jeep Avenger is produced, could potentially become a production base for Leapmotor.
The European Union this week notified several car manufacturers including BYD, Geely, and SAIC, the owner of MG, that additional taxes would be imposed on imports of electric vehicles, as these manufacturers were found to receive government subsidies, violating trade rules.
In addition to the existing 10% tariff, the tariff levels will vary depending on each manufacturer’s level of cooperation with the investigation. BYD will pay an additional 17.4%, while SAIC’s rate is 38.1%. Other manufacturers will pay taxes according to a weighted average rate. The plan for a temporary tariff as high as 48% will take effect from July 4 and be formally implemented in November.
This decision by the EU has sparked strong discontent from China, which may take retaliatory measures.
The current situation may still undergo changes. German officials have indicated that the German government is working to prevent (or at least delay) the tariffs from taking effect, believing that the escalation of trade tensions brings more harm than benefit.
Stellantis was formed in 2021 through a merger between the Italian-American company Fiat Chrysler Automobiles (FCA) and the French company Peugeot Group (PSA), each contributing half, making it the world’s fourth largest automaker. The group has a wide range of automotive brands, including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Mopar, Opel, Peugeot, Ram Trucks, and Vauxhall Motors. The name “Stellantis” is exclusively used to identify the company entity, while the names and logos of each brand under the group remain unchanged.
The company employs 400,000 people and operates in over 130 countries, with manufacturing plants in 30 countries.
(This article references reporting by Bloomberg)