As the competition for electric vehicles (EVs) intensifies, Stellantis, the parent company of Jeep and Chrysler, has joined the ranks of other international automakers collaborating with a Chinese startup.
Related Post: Despite Their Record-Breaking Sales, Gas-Powered Vehicles Won’t Be Replaced By Electric Vehicles Anytime Soon
The Dutch company declared on Thursday that it will pay approximately €1.5 billion (roughly $1.6 billion) to acquire a 20% share in Hangzhou-based EV manufacturer Leapmotor
Stellantis will have the sole right to manufacture, export, and market the Chinese brand’s automobiles outside of Greater China as a result of the two companies’ joint venture. The strategy is to begin by breaking into the European market.
Leapmotor will receive a 49% share in the joint venture, while Stellantis will hold a 51% stake. The recently established company plans to begin shipping in the second half of 2024.
Through the agreement, Stellantis will be able to take advantage of the startup’s “cost-efficient EV ecosystem” in order to further its fleet objectives, which include a commitment to provide more than 75 completely electric vehicles by the year 2030.
Because Chinese brands can produce electric vehicles (EVs) more quickly and cheaply, enabling them to charge consumers less, established automakers are starting to pay more attention to them.
VW unveiled a strategic partnership to jointly develop new vehicles in July, the same month it announced it was purchasing a 5% stake in Chinese electric vehicle manufacturer Xpeng.
Also Read: 3 Tips for HR Teams in the UK to Get Payroll Compliance Right
Mercedes was reportedly in talks to invest in Chinese electric vehicle manufacturer Nio in exchange for use of the startup’s R&D and technology, according to a Reuters story from last month that cited unnamed sources.
There are “no plans for an investment or cooperation with Nio,” a Mercedes representative said to CNN at the time, despite the company’s CEO having “ongoing regular dialogue with various industry leaders,” including the chairman of Nio. The startup with its headquarters in Shanghai did not reply to an earlier request for comment. Requests for updates on Thursday were not immediately answered by Mercedes or Nio.
The announcement of Stellantis’ most recent partnership comes approximately a year after the company ended its joint venture with Guangzhou Automobile Group Company (GAC) in China. That company used to manufacture and sell Jeep trucks in China.
Even with the new partnership, the Dutch company will stick to its earlier announcement that it would adopt an “asset-light approach” in the nation, Stellantis said on Thursday.
Leapmotor is selling its shares to Stellantis for 43.8 Hong Kong dollars ($5.6) each, as the Chinese company disclosed in a stock exchange filing on Thursday. Compared to its closing price on Wednesday, that amounts to a 19% premium.
Also Read: Surge in Demand and Regulatory Reforms Propel Granny Flat Developments in Australia
But investors weren’t won over. Following the deal’s announcement on Thursday, Leapmotor’s stock fell 11% in Hong Kong.
The impact of this partnership and the venture will be seen in the coming future. We will witness a future in which EVs become part of everyday life due to such partnerships.
