Leapmotor ready to start EV production at Stellantis Poland plant

A joint venture led by Stellantis has commenced production of electric vehicles designed by the Chinese automaker Leapmotor at Stellantis' manufacturing facility in Tychy, Poland. This information was reported by analysts at Jefferies, who cited statements made by Leapmotor's management team.

In a report released late on Sunday, Jefferies disclosed that Leapmotor's management had revealed during an analyst call that the initial units of their T03 small electric vehicle had been manufactured at Stellantis' assembly plant in Poland in the previous week. The production is reportedly on schedule to transition to mass manufacturing in September.

This development aligns with a Reuters report from March, which, based on information from two sources close to the matter, had indicated that Stellantis had selected its Polish facility as the primary production site in Europe for Leapmotor's vehicles. The decision was reportedly made primarily for cost-saving purposes.

The collaboration between Stellantis and Leapmotor has resulted in the formation of a joint venture, with the Franco-Italian automaker holding a majority stake of 51 per cent. This arrangement grants Stellantis exclusive rights to manufacture, export, and sell Leapmotor products outside of China, marking a first for a traditional Western automotive company.

This joint venture, operating under the name Leapmotor International, is a component of a broader partnership between the two companies. As part of this larger agreement, Stellantis is acquiring a 21 per cent stake in Leapmotor through a USD 1.6 billion investment.

According to Jefferies, the joint venture has plans to introduce a second Leapmotor model at Stellantis' Polish plant. The A12 SUV is scheduled to begin production in the first quarter of 2025.Leapmotor has initiated preparations for the localized production of components.

Leapmotor's management team, as reported by Jefferies, stated that the manufacturing costs at the Polish plant are approximately 400-500 euros ( USD 428.08- USD 535.10) per vehicle. This figure is comparable to the production costs at Leapmotor's facilities in China, and significantly lower than the estimated 1,000 euros per vehicle cost at plants in Italy.

For its C10 SUV model, Leapmotor intends to maintain production in China and export the vehicles to Europe in the initial stages. This strategy is based on the potential for higher pricing of this model in the European market, according to Jefferies' report.

It's worth noting that the European Commission recently announced the implementation of additional duties on imported Chinese electric vehicles, set to take effect in July. For Leapmotor specifically, these new tariffs will result in an additional 21 per cent duty on their imported vehicles.

This series of developments highlights the evolving landscape of the global electric vehicle market, showcasing the increasing collaboration between established Western automakers and emerging Chinese manufacturers, as well as the complex interplay of production strategies, cost considerations, and international trade policies.