Stellantis could build Leapmotor EVs in Europe, North America, CEO Tavares says

Stellantis could build Leapmotor EVs in Europe, North America, CEO Tavares says

Automotive News Europe — 2024-02-20

Automotive Industry

If Western governments block Chinese exports, Stellantis has the opportunity to build Leapmotor cars "inside the bubble," Carlos Tavares said.

Stellantis could build electric vehicles based on technology from Chinese affiliate Leapmotor in Europe, North America or other markets where it needs competitively-priced models to compete with Chinese EV makers, CEO Carlos Tavares said.

"At one point in time, Western governments may be tempted to block Chinese exports," Tavares said on Tuesday. "We have the opportunity to assemble Leapmotor cars inside the bubble. It could be Europe it could be North America."

Tavares's comments came after Automotive News Europe reported that Stellantis is considering building Leapmotor EVs in its Mirafiori plant in Turin, Italy.

"There's no reason to exclude any country that has a Stellantis plant," Tavares said during a video conference from New York on Tuesday.

The pressure to cut electric vehicle costs will force consolidation among global automakers, Tavares said. But he said he has no significant deals under discussion himself. "We have enough on our plate," Tavares said.

Earlier, during the month of February, Stellantis denied rumors that it was considering a combination with French automaker Renault.

Tavares said there could ultimately be as few as five major automakers as incumbents try to achieve economies of scale to compete with BYD and other rising Chinese automakers.

"You can discuss whether it's a good thing to fight against big Chinese companies like BYD with an anti-trust lock that prevents the Western companies from getting together," Tavares said.

Automakers are under pressure "to sell EVs at the price of ICE," Tavares said, using the acronyn for the internal combustion engine. "As long as we cannot sell EVs at the price of ICE while making a profit, we are not doing what consumers are expecting of us."

Chinese cost advantage

BYD and Chinese EV makers have a 30% production cost advantage over Western automakers, Tavares said.

Tariff "protection will not help," he said.

If Chinese automakers decide to build factories in Mexico to send vehicles to the US, the Mexican government will welcome that investment, Tavares said.

Washington will have to choose between breaking the rules of the US-Mexico-Canada trade agreement, or potentially adding to pressure on Mexican workers to migrate to the United States for jobs, he said.