China’s technology "feeds back" to Europe! Stellantis plans to use Leapmotor’s electric technology in European models for the first time

``` Stellantis is considering introducing the electric vehicle technology of its Chinese partner Leapmotor into its European mass-market brands, in an effort to drastically reduce costs amid fierce market competition. According to sources cited by Bloomberg, the automaker is evaluating expanding its joint venture cooperation with Leapmotor to gain access to the company’s more advanced battery and electric powertrain technology. Both parties aim to reach an agreement within the year. If the cooperation materializes, it would be the first time a major Western automaker relies on the underlying architecture and software of a Chinese company to support its models in Europe. Following this news, Stellantis shares rose 0.6% on the Milan market, though the stock has fallen by 31% so far this year. Sources familiar with the matter pointed out to the media that the related negotiations are still in the early stages. Seeking shortcuts to reduce costs and meet fierce competition This potential agreement will help Stellantis save on high development expenses and provide a shortcut for better catching up with BYD, MG, as well as local competitors like Volkswagen and Renault in the European market. In response to changes in the electric vehicle market, Stellantis is reducing its electrification strategy. Earlier this month, the company announced impairments and charges of up to 22.2 billion euros (about $26.1 billion), as part of broad efforts to stem declining market share and profits. As part of its business reset, Stellantis is restoring the robust Hemi V8 engine for its Ram pickup brand. In Europe, the company is reintroducing diesel engines to models such as the Opel Astra and Peugeot 308, and has launched a hybrid version of the Fiat 500. Sources revealed that although deepening cooperation with Leapmotor has long been planned, the company is currently focusing on more broadly applying its partner’s technology. Regarding the expansion of cooperation, Stellantis stated that the joint venture aims to combine the strengths of both parties and will regularly discuss potential ways to expand cooperation but declined further comment. In a briefing on Thursday, the company said that 2025 is the strategic implementation year for the partnership and will lay the foundation for deeper integration. Leapmotor representatives have not yet commented. Industry "reverse feeding" trend accelerates In the European local market, consumers are gradually abandoning traditional Western brands such as Volkswagen and are favoring highly attractive models like the BYD Seal crossover. In the face of this trend, Western automakers are turning to Chinese technology for support. Volkswagen is currently producing electric vehicles based on Xpeng’s platform, and its Audi brand is also adopting technology from its partner SAIC Group, although these models are currently only sold in the Chinese market. In addition, Renault’s soon-to-be-launched new electric Twingo in Europe also relies on the design and technology of the French automaker’s R&D center in China. In comparison, if Stellantis directly applies Leapmotor’s technology to its European brands, it will mark a substantial step for Chinese technology being “fed back” into the European market. Deepening strategic integration and restructuring pressure Stellantis’ cooperation with Leapmotor began in 2023. Under the leadership of then-CEO Carlos Tavares, Stellantis invested $1.1 billion to acquire a 20% stake in Leapmotor at the time (diluted to 15% last year) and established a joint venture called Leapmotor International. Leapmotor has begun offering three models through Stellantis’ European distribution network. After initial assembly in Poland, the company plans to produce vehicles this year at Stellantis’ plant in Zaragoza, Spain. Deepening cooperation with Leapmotor comes as Stellantis struggles with market share loss in the US and Europe. Antonio Filosa, who will take over as CEO in June this year, is set to announce the next strategic plan at Capital Markets Day in May. Previously, the company announced worse-than-expected impairment charges on February 6, leading to a 25% plunge in share price. Although Stellantis’ commitment last year to invest about $13 billion in the US has seen initial returns, its next moves in the European market remain unclear. Local factories are facing overcapacity, and fierce competition has further squeezed profit margins. Risk Reminder and Disclaimer The market entails risks; investment needs caution. This article does not constitute individual investment advice and does not take into account the unique investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their own situation. Investment at your own risk. ```