Stellantis resets China strategy with $1.6 bln stake in EV firm Leapmotor
Stellantis to acquire 21% stake in EV maker Leapmotor
Firms form JV to build and sell Leapmotor products outside China
Deal gives Stellantis a crucial foothold in China
Leapmotor shares tumble 10%, reversing initial 11% jump
Firms form JV to build and sell Leapmotor products outside China
Deal gives Stellantis a crucial foothold in China
Leapmotor shares tumble 10%, reversing initial 11% jump
Stellantis is buying a 21% stake in Chinese EV maker Leapmotor for $1.6 billion, it said on Thursday, in a reset of its China strategy to focus on electric vehicles after years of poor sales and manufacturing pullback in the world's biggest auto market.
"We haven’t been so successful in China so we prefer to rely on a Chinese partner. To win in China is better to win with a Chinese company," Stellantis CEO Carlos Tavares told a news conference in the eastern Chinese city of Hangzhou, seated beside Leapmotor CEO Zhu Jiangming.
Asked about how the Leapmotor partnership was different from its tie-ups with Dongfeng and GAC, Tavares said it was better for a Chinese entity to lead the way in the Chinese market.
"If we develop Leapmotor overseas, it gives Leapmotor better competitiveness in the Chinese market," he said.
Concerns about competition and the dilution of existing shareholdings sent Leapmotor shares down 11% on Thursday, reversing an 11% jump upon the market opening.
More than 40 EV brands are locked in a bruising price war in China, triggered by Tesla's (TSLA.O) price cuts earlier this year. Despite steep price reductions, EV sales are slowing due to weak consumer demand, putting margin pressure on automakers and their suppliers.
"If we develop Leapmotor overseas, it gives Leapmotor better competitiveness in the Chinese market," he said.
Concerns about competition and the dilution of existing shareholdings sent Leapmotor shares down 11% on Thursday, reversing an 11% jump upon the market opening.
More than 40 EV brands are locked in a bruising price war in China, triggered by Tesla's (TSLA.O) price cuts earlier this year. Despite steep price reductions, EV sales are slowing due to weak consumer demand, putting margin pressure on automakers and their suppliers.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
