Including taking stakes in brands like Maserati! Automotive giant Stellantis reportedly seeks investment from Xiaomi and XPeng Motors.

The embattled automotive giant Stellantis is reportedly in talks with Chinese car companies, seeking investment in its European business from these partners. The goal is to obtain funding, technology, and production capacity support in the European market, while focusing its own investment priorities on the Americas.

On March 12, Bloomberg reported that Stellantis executives have held separate meetings with Xiaomi and XPeng Motors to discuss various plans to restructure its European business. These include Chinese car companies acquiring equity in Maserati or other brands under Stellantis, as well as allowing Chinese partners access to European manufacturing capacity.

The report pointed out that according to informed sources, there is currently no certainty that any deal will be reached. After the news was released, XPeng Motors’ U.S. ADR shares rose 5.5%, Xiaomi’s stock price rose 2%, and Stellantis’ stock price also narrowed its losses.

Analysts said that these negotiations reflect the distinctly different development paths of Stellantis’ European and American business segments, and also mark that the giant automaker formed by the merger of Fiat Chrysler and PSA Group in 2021 is undergoing a profound strategic restructuring.

Stellantis European Business Under Pressure, Seeking "Blood Transfusion" From Chinese Capital

Stellantis' European business has long faced multiple pressures, including excess capacity, fierce competition, and high costs of transitioning to electrification.

Its brands such as Fiat, Opel, and Peugeot are beset from all sides in the European market, having to contend with traditional rivals like Volkswagen and Renault, while also facing constant encroachment from Chinese brands like BYD—currently, one out of every ten cars sold in Europe is from a Chinese brand.

Bloomberg's latest report states that according to insiders, Stellantis management believes that future higher investment returns will come from the American market, and they are cautious about making large-scale additional investments in Europe.

At the same time, bringing in Chinese car companies to invest in the European business could provide Stellantis with advanced electric vehicle technology and software capabilities, while Chinese car companies could gain better channels to enter the European market.

In addition to its contacts with Xiaomi and XPeng Motors, Stellantis is also advancing cooperation with Chinese car companies on multiple fronts.

According to previous Bloomberg reports, Stellantis is considering deepening its partnership with current Chinese collaborator Zhejiang Leapmotor Technology. The two parties are exploring synergies in electrification and software technology for affordable electric vehicles aimed at the European market.

In the U.S. market, Stellantis is promoting a new model investment plan worth about $13 billion, from which its Jeep and Ram pickup brands have initially benefited, and demand has rebounded.

Some sources indicate that this restructuring may ultimately lead to further separation between Stellantis' European and American business units, but a complete split is not a focus of current discussions.

In response, Stellantis issued a strongly worded statement saying, "We state in the clearest terms possible that the claims that the company is considering a split are groundless, and any assertions to the contrary are pure fabrication."

Major Write-downs Weigh Down Company, Strategic Transformation Is Urgent

According to reports, the talks took place against the backdrop of Stellantis just announcing record-high impairments and write-downs, totaling 22.2 billion euros (approximately $25.7 billion), most of which were linked to the company’s decision to scale back its electric vehicle strategy.

This strategic reversal—including cancellation of battery joint ventures and several future models—wiped out about a quarter of the company’s market value in a single day.

Since taking over last year, current CEO Antonio Filosa has been committed to stabilizing the company’s operations. Filosa is expected to disclose more details on the company’s future plans at the investor day to be held in the U.S. on May 21.

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