One year after filing for bankruptcy with its Jeep joint venture in China, Stellantis has found a new partner in EV startup Leapmotor to utilize its existing technology ecosystem as part of a $1.6 billion joint venture that will expand availability of the Chinese EVs in new markets in Europe, possibly beyond.
Stellantis is a global automotive conglomerate looking to maintain its foothold in the market by electrifying several marques under its umbrella (much to the chagrin of CEO Carlos Tavares). The company is currently responsible for brands like Dodge, Fiat, Maserati, Jeep, and RAM, to name a few, selling vehicles in major auto markets like Europe and North America.
Previously, Stellantis operated a Jeep joint venture in China with GAC Group that it inherited from Fiat Chrysler Automobiles (FCA) before its merger with Peugeot S.A. in early 2021 that birthed its current iteration.
Last October, Stellantis announced it was terminating the JV with GAC, citing dwindling sales and, according to Tavares, a “broken trust” with one of the top five automakers in China. GAC clapped back, citing a “lack of respect” from the Stellantis chief, setting the stage for a bankruptcy filing, thus solidifying its expiry.
This past August, however, Stellantis shared it was returning to the Chinese well in search of a new partnership to take advantage of local EV technology, arguably some of the most innovative and fastest evolving in the industry right now.
At the time, we reported that Leapmotor was a rumored suitor for Stellantis after talks with Volkswagen Group fell through, leading the German automaker to claim its own stake in XPeng Motors for $700 million.
Today, we can confirm that Stellantis has, in fact, invested billions in Leapmotor for a piece of its EV technology.
Stellantis buys 20% stake in Leapmotor, forms JV
According to a press release from Stellantis today, it has acquired an approximately 20% stake in Leapmotor in exchange for an investment of 1.5 billion euros ($1.58 billion). The investment also includes the forming of Stellantis International – a new joint venture with Leapmotor in which the former owns a 51% stake.
The joint venture secures exclusive rights for Stellantis to the manufacturing, sale, and export of Leapmotor vehicles everywhere outside of China. Leapmotor looks to utilize Stellantis’ global presence to boost sales in China and beyond, beginning in Europe. At the same time, Stellantis will take advantage of its new partner’s existing EV ecosystem to reach its own electrification goals – part of its Dare Forward 2030 strategy that includes a €50 billion+ investment over the next decade. Per Stellantis CEO Carlos Tavares:
As consolidation unfolds among the capable electric vehicles start-ups in China, it becomes increasingly apparent that a handful of efficient and agile new generation EV players, like Leapmotor, will come to dominate the mainstream segments in China. 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 has a similar tech-first, entrepreneurial mindset to ours. 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. I want to thank Mr. Zhu Jiangming and the teams from both sides of our great companies for their leadership and collaboration in creating this new opportunity for both of us.
Leapmotor delivered roughly 111,000 new energy vehicles (NEVs) in 2022, earning a spot in the first tier of automakers in a saturated Chinese EV market. While it currently focuses on the mid- to high-end EV market, Leapmotor says it plans to cover A- to E-segments in the next three years. During a signing ceremony, Leapmotor Founder and CEO Zhu Jiangming also spoke to the new partnership:
Today it is a great milestone in Leapmotor’s history, and I am thrilled to witness this moment together with Mr. Tavares and his team. Developed with our in-house, full-suite technology capabilities, Leapmotor brings to the market the best-in-class EV products in a most cost competitive way. We believe in win-win partnerships formed by strong players in the fast-evolving environment. Working with Stellantis, we will continue to be innovative and creative in technology and business synergies and will bring Leapmotor EV cars to the global market.
It will be interesting to see how this joint venture affects both automakers, as Stellantis has catching up to do in electrification and has virtually no presence in China until now, while Leapmotor looks to continue to find an audience in a competitive market in China before entering Europe – a region that is already seeing several other Chinese companies fighting for consumer’s attention against loyalty to local legacy marques.
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