Tavares Balances Leapmotor Partnership with Concerns Over Chinese Competition

At the 2024 Paris Motor Show, Stellantis CEO Carlos Tavares took center stage amid a period of uncertainty for the company. Just weeks after issuing a significant profit warning, Stellantis, known for its lucrative U.S. sales of Jeep® SUVs and Ram pickups, has faced investor skepticism and questions about its direction. Tavares confronted these challenges directly, discussing the automaker’s struggles in the U.S. market, the growing competition from Chinese electric vehicle (EV) manufacturers, and Stellantis’ evolving global strategy.

Tackling U.S. Market Issues – 

One of the most pressing challenges for Stellantis is the overstocked inventory in the United States, which has contributed to financial strain. Tavares addressed this head-on, admitting that decisions made earlier in the year might have been too risky. Reflecting on the situation, he shared, “In Q2 2024, the plan that was designed and that had been decided was a plan that we [would] qualify as innovative and risky. And I hesitated: do I break this delegation of authority at the risk of being criticized for my authoritarianism and for my decisions taken centrally far from the frontline, or do I let it happen? I hesitated, and I let it happen.”

However, Tavares assured that a resolution is on the horizon, expressing confidence that the stock issue will be resolved by the end of the year. “What I told you is that I think that by Christmas, we will have solved the stock problem in the U.S. You can count on that,” he stated, signaling his commitment to regaining stability in the American market.

Balancing Competition and Collaboration with Chinese EV Makers – 

While Stellantis grapples with its challenges in the U.S., the company is also navigating the competitive EV landscape in Europe, where Chinese manufacturers are increasingly making inroads. Tavares highlighted the potential threat these new market entrants posed, emphasizing the value of Stellantis’ historic European brands. “Many Chinese manufacturers have come knocking on my door to buy brands, and I can also tell you that I refused because I think it is an intangible asset that has value, with a history on which we can rely to build the future,” he explained. “I consider that European brands, which are generally more than a century old, are part of the company’s assets.”

Despite his cautious stance towards Chinese automakers, Stellantis is partnering with Chinese EV startup Leapmotor to bring new models to European markets. This collaboration underscores Stellantis’ strategic pivot towards accessible and high-tech electric mobility outside of Greater China. Tavares highlighted the joint venture’s importance: “Together with Leapmotor, we are making high-tech, affordable electric mobility accessible to consumers beyond Greater China. Our combined strengths allow us to bring innovative solutions to the market quickly and effectively.”

Leapmotor’s European Debut at the Paris Motor Show – 

Leapmotor used the 2024 Paris Motor Show to showcase its vision for electric mobility beyond China, with the global unveiling of the B10, the first model in its new B-series. This C-SUV is tailored to meet the needs of tech-oriented, eco-friendly consumers, offering a blend of performance, style, and modern technology. Built on the LEAP 3.5 platform, the B10 features a customizable digital cockpit, intelligent driving capabilities, and a suite of advanced driver assistance systems (ADAS). Zhu Jiangming, Founder of Leapmotor, emphasized the strategic importance of the B10, stating that it marks the company’s first step into international markets and embodies Leapmotor’s goal of making electric driving more accessible to consumers worldwide.

The B10 wasn’t the only highlight of Leapmotor’s display. The company also revealed a broader lineup aimed at various European market segments. Among them is the C16, a larger D-SUV designed for long-distance travelers. It boasts an 800-volt silicon carbide charging platform, reducing charging times to just 15 minutes, and its flexible 2+2+2 seating configuration offers an option for families needing extra space and versatility.

For urban commuters, Leapmotor introduced the T03, a compact A-segment EV that prioritizes affordability without skimping on features. Priced from €18,900 (about $19,900), the T03 aims to attract cost-conscious buyers looking for an efficient solution for city driving.

Another notable model is the C10, which falls into the D-SUV category. It emphasizes safety and structural innovation, integrating Leapmotor’s Cell to Chassis technology for better battery management. It’s priced from €36,400 (around $38,400) and aims to meet high safety standards, including a 5-star E-NCAP safety rating.

With this diverse lineup, Leapmotor is positioning itself as a serious contender in the European EV market. It will also challenge the brands Tavares has sworn to protect from Chinese EVs, allowing Leapmotor products to sit in the same showrooms across Europe.

Strategic Challenges Ahead – 

Stellantis’s collaboration with Leapmotor and the introduction of its products to Europe are complex balancing acts. While Tavares is cautious about competition from Chinese EV brands, he is also leveraging their innovation to stay competitive in the global market.

As Tavares prepares for a future transition in leadership, he remains focused on ensuring that Stellantis emerges from this period of transformation as a strong player in the global EV market. “What I want is to leave a Stellantis that is robust, which is profitable on a recurring basis, and which has successfully negotiated this electrification shift, that is to say, by emerging among the winners of this moment, which is, as you know very well, Darwinian,” Tavares remarked, alluding to the competitive nature of the automotive industry’s shift towards EVs.