Stellantis is looking to boost its presence in China where it is a small player, while Leapmotor has ambitions to expand aggressively into Europe.
Stellantis on Thursday said it will invest 1.5 billion euros in Chinese electric vehicle startup Leapmotor.
Stellantis, which owns brands such as Chrysler and Maserati, said that the investment will give it a roughly 20% equity stake and two board seats in Leapmotor. "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," Stellantis CEO Carlos Tavares said in a press release on Thursday.
For Stellantis, the Thursday deal gives it access to Leapmotor's technology and manufacturing footprint to help the European firm boost sales in China.— a high-profile European auto event — where it unveiled the C10 sports utility vehicle. In the next two years, the company said it plans to introduce five "globally-oriented" products across the world, the automaker said said at the event.
Counterpoint's Mukherjee said Chinese auto companies face challenges in Europe "in building consumer trust and establishing robust dealership networks." This deal could help Leapmotor expand into Stellantis' network, "potentially allowing sales under the Stellantis brand." Last year, a joint venture between Stellantis and Guangzhou Automobile Company to produce Jeep products in China, filed for bankruptcy.Stellantis' huge investment in Leapmotor underscores the pressure that traditional automakers are facing from newer and nimbler Chinese players, as EV sales continue to rise.This has raised worries among Europe's automakers and politicians.Stellantis' CEO Tavares has been critical of low-cost Chinese cars arriving in Europe in the past.
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