Stellantis Invests USD1.6bn in Chinese EV Startup Leapmotor

Stellantis [STLA:US], the parent company of renowned vehicle brands such as Chrysler and Maserati, has disclosed a significant investment of USD1.6bn in Chinese electric vehicle (EV) manufacturer Leapmotor, as reported by Reuters on October 26. This investment secures Stellantis a 21% equity stake in Leapmotor, along with two seats on Leapmotor’s board. Leapmotor, ranking ninth in new energy vehicle (NEV) sales in China, has emerged as a key player in the Chinese EV market. As part of this collaboration, the two companies will establish the Leapmotor International joint venture (JV) with a focus on introducing Leapmotor products beyond Greater China starting in the latter half of 2024. This strategic alliance empowers Stellantis to leverage Leapmotor’s advanced technology and robust manufacturing capabilities, enhancing the European automaker’s presence and sales in the dynamic Chinese market.

In response to the global shift toward electric vehicles, Stellantis, like other established automakers, is adapting its strategies to align with this transformation. With many Chinese EV manufacturers launching competitively priced models in Europe, Stellantis aims to capitalize on this trend through its partnership with Leapmotor. Notably, this collaboration not only benefits Stellantis but also elevates the brand value of Leapmotor, which faced a net loss of RMB5.1bn (USD734m) in 2022 amid the intense price competition in China’s automobile market. This move mirrors a broader trend within the automotive industry, as demonstrated by Volkswagen [VOW:GR], which recently announced a substantial investment of USD700m in Chinese EV manufacturer Xpeng [9868:HK].

Sources:

https://www.reuters.com/business/autos-transportation/chinas-zhejiang-leapmotor-will-issue-shares-worth-11-bln-stellantis-2023-10-25/

https://www.ft.com/content/e9071987-4931-4a4f-bcc7-a975a285ecf9

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