Stellantis and Leapmotor Reconsider EV Production Plans

SHANGHAI (Reuters) – Stellantis (NYSE:STLA) and its Chinese partner Leapmotor (HK:9863) have decided to scrap plans for producing a second electric vehicle model at Stellantis' Polish plant. Instead, the joint venture is exploring the option to produce the B10 electric crossover at a Stellantis factory in Eisenach, Germany, or its Trnava plant in Slovakia.

Sources indicate the decision followed advice from the Chinese government, which has urged automakers to halt significant investments in European countries that supported additional tariffs on Chinese-made EVs. During a meeting with China’s Ministry of Commerce on October 10, automakers were informed to pause large-scale investments in EU countries that backed the tariff proposal.

The B10 EV was showcased at the Paris Motor Show on October 14, just days after the Chinese government meeting, and both car manufacturers have touted it as a milestone in their partnership. Notably, Poland is among the EU members supporting tariffs up to 45% on imported Chinese EVs.

While Germany and Slovakia opposed the tariffs, the decision to shift B10 production was influenced by political and economic pressures rather than purely operational concerns. Stellantis' Tychy plant in Poland has been assembling the T03 compact EV with components from China, but it remains unclear if these operations are also under review.

Producing the B10 in Germany would incur higher utility and labor costs compared to Poland. Leapmotor intends for the B10 to kickstart a series of EVs targeting markets beyond China, introducing sales into Europe in September. Stellantis CEO Carlos Tavares has emphasized that this partnership aims to provide "high-tech, affordable" EVs internationally.

Stellantis holds a 51% share in the joint venture, while Leapmotor retains the remaining 49%. Approval from the Chinese government is required for direct investments overseas under local regulations.