TMTPost -- Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technologies Ltd. is making progress in building vehicles through a venture with its European partner Stellantis NV, the second largest European automobile manufacturer by sales.
Credit：Leapmotor
Leapmotor will produce EVs at a historic Fiat facility in Tychy, a city in the south of Poland, Reuters learned from people close to the matter. The sources suggested the Polish plant could start production of T03, the most affordable model of Leapmotor, by the end of June, using the semi-knocked down (SKD) technique involving turning partially assembled kits into finished vehicles.
T03 is a mid-size electric SUV that has a NEDC (New European Driving Cycle) range of up to 451 kilometers (280 miles) on a single charge. Leapmotor launched three versions of the 2024 T03 in China at the beginning of this month, starting at RMB49,900, RMB59,900 and RMB69,900, respectively. Leapmotor has already marketing the T03 in some European markets with starting price at around 20,000 euros (US$21,642). Reuters noted the model can help Stallantis boost its affordable vehicles and compete with Renault’s Dacia Spring and BYD Co., Ltd.’s Seagull.
Stellantis and Leapmotor didn’t comment on the report. The report indicated Leapmotor and Stellantis, owner of Chrysler, Fiat and many other iconic brands, are moving closer to implementtheir plan to build an EV factory in Europe, part of partnership reached almost four months ago. The Fiat car maker announced late October that it will spend 1.5 billion euros (US$1.58 billion) to acquire a stake of about 20% in Leapmotor. Leapmotor is going to issue 194.3 million Hong Kong shares to Stellantis for HK$43.8 apiece, a 19% premium to their close on October 25. Stellantis will hold around 21.07% of Leapmotor’s Hong Kong shares upon the transaction completes. The two companies are also going to set up a joint venture, in which Stellantis will own a 51% stake and have the exclusive rights for the export, sale and production of Leapmotor vehicles outside Greater China.
The joint venture is expected to begin shipments in the second half of 2024 starting in Europe, aiming to sell 500,000 units outside of China by 2030, according to Stallantis’ presentation about earnings in the third quarter of 2023. It said Leapmotor targets sales of 1 million units annually in China in the long run, capitalizing on position as tech-led, pure-EV domestic leader. It expected the venture will have no material impact to Stellantis’ industry-leading adjusted operating income (AOI) margins.
At an earnings call with analysts late October, Stellantis Chief Financial Officer (CFO) Natalie Knight at the call described Leapmotor as Stellantis’ 15th brand, with sales and revenues of the joint venture fully consolidated into its balance sheet. Europe will be the first market for Leapmotor's EVs, and the venure will distribute the company’s vehicles to other global markets, with long-term exclusive distribution on cars sold outside China, according to Knight. The venture also includes the option to produce Leapmotor cars in Europe to avoid potential high tariffs imposed on vehicles built in China from an EU investigation, Knight told analysts.
When releasing earnings of the year 2023 last month, Stellantis CEO Carlos Tavares was reported to divulge that the company may build Chinese EVs in Europe for Leapmotor if there was a good business case to support the strategy. Tavares mentioned Stellantis’ Mirafiori plant in Turin as the potential home to Chinese EV builds for Leapmotor. Stellantis’ local dealers in the European market would then sell those EVs.
Earlier this month, China's National Development and Reform Commission (NDRC) was said to have approved a proposed join venture between Leapmotor and Stellantis, pending for regulatory approval in other markets. While not responding to the news about NDRC’s greenlight, Leapmotor said in a statement later that the executive team of the venture is in place as C10, its first EV model targeting international markets, will soon start sales from Germany, France, Italy and Spain.
Leapmotor at beginning of this month announced it delivered 6,566 EVs last month, more than doubling a year earlier, though the delivery sank 46.5% from January. The automaker began presales of C10 on January 10 and has accumulated over 45,000 preorders of the model to the date prior to the official devlivery release on March 2.
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