The Chrysler parent company Stellantis is building her e-car business China out of. The group is acquiring 21 percent of the Chinese electric car maker Leapmotor for $1.6 billion, Stellantis said, whose brands include Fiat and Peugeot belong, on Thursday. In addition, a joint venture will be founded in which Stellantis will hold 51 percent and will have the marketing rights for Leapmotor products outside of China. The Leapmotor International joint venture is intended to boost sales of the Chinese brand’s electric cars abroad.
“We haven’t been that successful in China, so we prefer to rely on a Chinese partner,” said Stellantis boss Carlos Tavares. Stellantis is struggling to sell cars in China and only has a 0.3 percent market share in the country, reports CNBC
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Now more and more Chinese ones are being brought Electric car-Manufacturers across Europe are bringing more cost-effective models onto the market and making life difficult for local car manufacturers. “The Chinese offensive is visible everywhere,” Tavares told reporters. “With this deal we can benefit from it instead of being the victims of it.”
The joint venture, registered in the Netherlands, is expected to start its export business in the second half of 2024. Stellantis will receive two seats on the board of the Chinese company. The partnership will help Stellantis expand its electric vehicle offerings. The car manufacturer has set itself the goal of generating all of its sales in Europe and half in the USA with vehicles with electric engines by 2030.
The deal, which still needs regulatory approval, will see Leapmotor issue 194.3 million Hong Kong-listed shares to Stellantis at HK$43.8 per share. This corresponds to a premium of 19 percent compared to the last closing price. Shareholder Dahua said it would sell its 90 million Leapmotor shares to Stellantis as part of the deal.
China is the world’s largest market for electric vehicles, according to World market leader BYD
and the US group Tesla dominates, while domestic start-ups such as Xpeng and Nio are also heating up the competition. Like many of China’s electric car startups, Leapmotor has tried to position itself as a technology-focused brand. The company has developed its own semi-autonomous driving system and the architecture on which its cars are based. According to CNBC, Leapmotor currently has three cars on offer and plans to launch different vehicle models in the coming years.
Stellantis, which was formed by the merger of France’s PSA with Fiat Chrysler (FCA) in early 2021, has struggled to sell cars in China. The group therefore tried to get its foot in the door with a joint venture with Dongfeng Motor. Stellantis announced a year ago that it would end its Jeep-making joint venture in China with Guangzhou Automobile Group after disappointing results.