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Stellantis announced on the 26th of October that it plans to invest EUR1.5 billion (USD1.58 billion) in Leapmotor. Stellantis would acquire a 20% stake in Leapmotor making it a significant shareholder. The deal also outlines the formation of Leapmotor International. A 51/49 Stellantis-led joint venture (JV) that has exclusive rights for the export, sale, and manufacturing of Leapmotor products outside China.
A Mutually Beneficial Agreement
As a significant shareholder, Stellantis will hold two seats on Leapmotor’s Board of Directors. The investment will be mutually beneficial, allowing Stellantis to increase its presence in China, leveraging Leapmotor’s extensive EV ecosystem. Similarly, the partnership aims to further boost Leapmotor’s China sales, as well as establishing a global presence using Stellantis’ global commercial presence. The JV, based in the Netherlands, will begin shipments in the second half of 2024. Initially it will focus on the European market before establishing itself elsewhere.
Differences on the Chinese Market
Established in 2015, Leapmotor saw initial slow growth in the EV market, however, in the last few years sales have increased consistently. In 2020 it sold approximately 11,000 vehicles, by 2022 this had increased to 111,000. On the other hand, Stellantis has struggled to obtain a strong foothold with EVs in the Chinese market. Its sales declined from a peak in 2021 of just over 11,000 to less than 2,000 so far this year. Furthermore, this agreement follows Stellantis’ recent announcement of its intentions to sell Chinese assets to its historic JV partner, Dongfeng.
Rho’s Evaluation
Stellantis’ move aligns with…
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Image credit: Adobe Stock
Source: Stellantis