Stellantis Takes a Leap in the EV Race: Stellantis, the multinational automotive corporation known for brands like Jeep and Chrysler, has entered the ever-competitive electric vehicle (EV) arena by partnering with a Chinese startup. In a recent announcement, the Dutch group revealed its acquisition of a 20% stake in Leapmotor, an EV manufacturer based in Hangzhou, at a price of about €1.5 billion (almost $1.6 billion).
This strategic alliance will give birth to a joint venture where Stellantis will hold the majority share, with a 51% stake, while Leapmotor will own 49%. The primary aim is to grant Stellantis exclusive rights to manufacture, export, and sell Leapmotor’s EVs beyond Greater China, focusing initially on entering the European market. Shipments are expected to commence in the latter half of 2024.
Stellantis, with ambitious plans to offer over 75 fully electric models by 2030, intends to capitalize on Leapmotor’s “cost-efficient EV ecosystem” to advance its electrification objectives. Chinese EV brands have garnered attention from established automakers due to their ability to rapidly produce EVs at lower costs, ultimately making electric vehicles more accessible to consumers.
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This move by Stellantis mirrors the broader trend in the automotive industry, where global players are collaborating with Chinese EV manufacturers. In a similar vein, Volkswagen recently acquired a 5% stake in Chinese EV maker Xpeng, entering into a strategic partnership to jointly develop new vehicles. Mercedes was also reportedly in discussions with Chinese EV manufacturer Nio, but both companies clarified that no investment or cooperation plans were in place.
Notably, Stellantis’s latest partnership follows the termination of its previous joint venture in China with Guangzhou Automobile Group Company (GAC), which was responsible for producing and distributing Jeep trucks in China. Despite this new venture, Stellantis remains committed to its “asset-light approach” in the Chinese market, as previously announced.
The deal involved Stellantis acquiring Leapmotor shares at a price of 43.8 Hong Kong dollars ($5.6) per share, representing a 19% premium over Leapmotor’s closing price before the announcement. However, it appears that investors reacted cautiously, as Leapmotor shares declined by 11% in Hong Kong after the news of the partnership. The EV race continues to evolve, and this partnership is just one of many moves by automakers to secure their positions in the growing electric vehicle market.