Stellantis Starts Chinese BEV Assembly in Europe, Analysts Claim

Stellantis has begun European production of battery-electric vehicles from its joint venture with a Chinese automaker to bypass punitive tariffs being considered by the European Union.

The automaker group entered a joint venture to assemble and distributed BEVs made by Leapmotor last year investing 21% into the company while taking 51% ownership of the JV called Leapmotor International.

Now analysts at Jefferies say they were told on a call with Leapmotor executives that production of the JV’s vehicles has begun at Stellantis’s Tychy plant in Poland, Reuters reports.

Analysts hear from Leapmotor management that the first units of its T03 entry-level BEV are rolling off Stellantis assembly lines and are on schedule for mass production in September.

While Stellantis has yet to make any statement on this claim, it does fall in with comments made by CEO Carlos Tavares last week addressing an Investor Day presentation at Auburn Hills, MI. He says: “We have a financial incentive to grow this business outside of China. We are going to leverage their own cost competitiveness and their own technology, namely in electric powertrains and connectivity, and we leverage this to our benefit through this export company.

“When we discuss which cars we are going to bring to Europe, as a starter among other regions, we have already pre-decided which of those cars will be assembled in our plants outside of China. This means we have decided which level of tariffs where we go CKD (completely knocked-down) or below that level of tariff we go CBU (complete built units). In this way we are trying to anticipate what is going on in the world.”

On the group’s relationship with China, Tavares says: “What is clear is that we don’t want to be defensive. Our strategy is...we are ourselves, offensive and surfing the wave of the Chinese offensive.”

He points to the country’s ability to make cars up to 30% cheaper than most western production facilities. However, Jefferies analysts claim manufacturing costs at Stellantis’s Polish plant amount to around $428 to $535 per car and close to those at Leapmotor's base in China. At the same time vehicles made at a typical Italian factory cost around $1,071 per unit.