Stellantis hinted at building Leapmotor EVs in Europe, North America

Tavares suggested potential repercussions on U.S.-Mexico-Canada trade agreements

Stellantis CEO Carlos Tavares disclosed plans for potential production of electric vehicles (EVs) in Europe, North America, or other markets using technology from Chinese affiliate Leapmotor, aiming to compete with Chinese EV manufacturers at competitive prices. Tavares highlighted the possibility of assembling Leapmotor cars within Stellantis-operated facilities to mitigate potential export restrictions from Western governments. Consideration for manufacturing Leapmotor EVs in Italy has been reported, with Tavares indicating openness to utilizing any Stellantis plant worldwide for production. While acknowledging the necessity of cost reduction in EV manufacturing, Tavares dismissed rumors of significant deals under discussion, citing existing commitments. Stellantis recently refuted speculations regarding a merger with French automaker Renault.

Tavares anticipates industry consolidation, envisioning a landscape with as few as five major automakers striving for economies of scale to compete with burgeoning Chinese counterparts like BYD. Highlighting the imperative to align EV pricing with internal combustion engine (ICE) vehicles, Tavares underscored the 30% cost advantage held by Chinese EV manufacturers. He emphasized that tariff protection would not address this disparity and speculated on the potential implications of Chinese automakers establishing factories in Mexico for U.S. market access. Tavares suggested potential repercussions on U.S.-Mexico-Canada trade agreements and labor dynamics, posing a dilemma for Washington between upholding trade regulations and managing workforce migration pressures.