Stellantis will form a joint venture with Leapmotor, Leapmotor International, which will begin export operations in the second half of 2024.
(Image credit: Leapmotor)
Chinese electric vehicle (EV) company Leapmotor has announced that it will receive a strategic investment from Stellantis NV, Europe’s second-largest carmaker by sales, confirming rumors that have been circulating for months.
Stellantis will invest 1.5 billion euros in Leapmotor for a roughly 20 percent stake and will get two seats on the company’s board of directors, an announcement from the Chinese EV firm said today.
The two companies plan to form a joint venture called Leapmotor International to accelerate and expand global sales of Leapmotor’s products by leveraging Stellantis’ global resources, the announcement said.
Stellantis will have a 51 percent stake in the joint venture, with Leapmotor holding the other 49 percent.
The arrangement is interesting because before China fully opened its auto market to foreign investment, foreign carmakers entering the country were required to set up joint ventures with local carmakers to hold no more than 50 percent of the equity.
The joint venture has exclusive rights to conduct export and sales operations to all other markets in the world except Greater China, as well as exclusive rights to manufacture Leapmotor products locally.
“The establishment of a global partnership between the two companies will be an industry first, whereby a world-leading automaker and a new force in electric vehicles from China collaborate on a global electric vehicle program,” Leapmotor said.
(Image credit: CnEVPost)
In addition to further increasing Leapmotor’s sales in China, the partnership will also help Stellantis increase sales of the Leapmotor brand in local markets, starting with Europe, the announcement said.
Stellantis plans to leverage Leapmotor’s cost-effective EV ecosystem to achieve the electrification goals of its “Dare Forward 2030” strategic plan.
The two companies may also further explore mutually beneficial synergies, with Leapmotor International expected to begin export operations in the second half of 2024, according to the announcement.
Stellantis will have two seats on Leapmotor’s board of directors, and the European automaker will appoint Leapmotor International’s chief executive officer.
As consolidation occurs among the stronger EV startups in the Chinese market, a small number of efficient and nimble EV startups like Leapmotor will dominate the mainstream segments of the Chinese EV market, said Carlos Tavares, CEO of Stellantis.
With this strategic investment, an area of potential in Stellantis’ business model will be developed and the group will profit from Leapmotor’s competitiveness in China and other markets, Tavares said.
Leapmotor founder and CEO Zhu Jiangming said the company brings best-in-class EVs to the market in the most cost-competitive way, and he looks forward to working with Stellantis to sell Leapmotor’s products around the world.
Leapmotor was founded in 2015, a year after Nio (NYSE: NIO), and is one of the earliest new car-making forces in China.
The company had annual vehicle deliveries of 7,380 units, 43,121 units, and 111,168 units from 2020 to 2022, data monitored by CnEVPost show.
Leapmotor saw a big drop in deliveries earlier this year, with January deliveries falling to 1,139 vehicles, partly due to a product switch.
The company’s monthly deliveries got back above 10,000 units in May and saw a record 15,800 deliveries in September. In the January-September period, Leapmotor delivered 88,827 vehicles, up 1.4 percent year-over-year.
