Stellantis joint venture to sell Chinese EVs in Europe, other parts of globe

A Stellantis-led partnership plans later this year to sell Chinese-made electric vehicles in nine European countries and other parts of the world, including India, South America and Australia.

The announcement, which came during a joint news conference with EV startup and Stellantis partner Leapmotor on Tuesday in Hangzhou, China, did not include any plans for bringing Chinese EVs into the U.S. market.

Stellantis CEO Carlos Tavares explained in a follow-up discussion that the fact that no Chinese EVs are being sold in the United States influenced strategy, but he also noted the impact of tariffs. The Biden administration on Tuesday announced substantial new tariffs on EVs and other products from China.

Tavares described the effect of tariffs as creating “bubbles,” which he suggested would lead to increased inflation inside the affected areas.

“There is no real Chinese competition right now in the U.S. market,” he said, noting that Europe is a different case. “It looks like the U.S. is going for a very strong protectionism whereas for the time being Europe is keeping the market reasonably open with a lower tariff of 10%.”

What about shipping Chinese EVs through Mexico to US?

That level of tariff is not significant enough to offset the 30% cost-competitive edge that Chinese-made EVs enjoy, according to Tavares.

The European countries where the EVs will be sold beginning in September are France, Italy, Germany, the Netherlands, Spain, Portugal, Belgium, Greece and Romania.

Whether Stellantis, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, would consider bringing Leapmotor EVs to the United States in the future would depend on tariffs, Tavares said, also weighing in on the possibility of entry through Mexico.

“I understand that, of course, if the Chinese would like to come to the U.S. they would eventually use Mexico as a sourcing base. I don’t know if this is something that would be acceptable for the U.S. administration,” Tavares said.

He noted that if Chinese EVs do come to the U.S. market, however, that Stellantis would consider bringing them as well because U.S. consumers want EVs that cost less than $25,000. One way to do that is through Leapmotor, but “we can find other ways also.”

Tavares said the company would look at what the U.S. administration is willing to accept, calling it a “very sensitive matter.”

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One additional way that the company plans to deal with tariffs, Tavares indicated, would be to use its manufacturing footprint, so Leapmotor EVs could be either imported from China or made in other countries.

The news about the plan follows an announcement in October that Stellantis would invest $1.6 billion (1.5 billion euros) to acquire a 21% equity stake in Leapmotor, described by the company as being in the top three among Chinese EV startup brands in 2023. A Stellantis-led joint venture called Leapmotor International, headquartered in Amsterdam, will be responsible for Leapmotor sales and manufacturing outside of greater China, according to a news release.

Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber. Submit a letter to the editor at freep.com/letters.