MILAN: Stellantis NV is considering tapping electric-vehicle technology from its Chinese partner Leapmotor to help lower costs across its mass-market European brands such as Fiat, Opel and Peugeot, according to people familiar with the plans.
The manufacturer is weighing an expansion of the scope of its joint venture with Leapmotor to access the Chinese company's more advanced battery and EV powertrain technology, the people said, declining to be named discussing internal deliberations.
Stellantis in Europe currently sells Leapmotor models like the C10 SUV through its network of dealerships.
Talks are at an early stage and any agreement would need to clear hurdles on concerns around data protection while using technology from China, the people said.
The partners also need to address regulation in the US that bans the import or sale of connected vehicles with technologies linked to China or Russia from 2027.
Still, the pair are aiming to seal a deal within the year, the people said.
It would be the first time for a major Western automaker to rely on a Chinese company's vehicle underpinnings and software to bolster its models in Europe.
Stellantis rose 0.6% in Milan at 1.15am. The stock is down 31% since the start of the year.
Stellantis said its venture with Leapmotor sets out to combine strengths of both partners with regular discussions about potential ways to expand cooperation. It declined to comment further.
In a presentation Thursday, the company said "2025 was a year of strategic implementation for the partnership, setting the stage for deeper integration."
Leapmotor representatives weren't immediately able to comment.
A pact would help Stellantis save on development spending and provide a shortcut to better compete with China's BYD Co. and MG in Europe, as well as local rivals including Volkswagen AG and Renault SA.
The manufacturer is scaling down its EV strategy, and earlier this month announced writedowns and charges of €22.2 billion (RM101.91bil) as part of a broader push to stem a decline in market share and profits.
The automaker also has been resizing or terminating some battery joint ventures amid the electric pullback.
As part of the reset, Stellantis is resurrecting the powerful Hemi V8 engine for its Ram truck brand.
In Europe, the company is putting diesel engines back into models such as the Opel Astra and Peugeot 308 and has been introducing a hybrid version of its Fiat 500.
While a deeper cooperation with Zhejiang Leapmotor Technologies Inc has been on the cards for a while, the company is now focusing on using more of the partner's technology, the people said.
VW, also under pressure to catch Chinese rivals, is making EVs on Xpeng Inc's platform and its Audi brand is using partner SAIC's technology, though the models aren't for sale outside of China.
Renault's new electric Twingo, going on sale soon in Europe, is relying on the French manufacturer's R&D operations in China for design and technology.
Manufacturers are racing to match China's development speed and cost cuts, with manufacturers there often bringing new vehicles to market twice as fast.
Locally, buyers are deserting Western brands such as VW while attractive models like BYD's Seal crossover are successfully targeting buyers in Europe.
Stellantis' venture with Leapmotor dates back to 2023, set up under then-Chief Executive Officer Carlos Tavares whose broad cost cutting drive turned bad when model quality and lineup suffered.
The deal included Stellantis taking a then-20% stake for US$1.1 billion (RM4.27bil) in Leapmotor - last year diluted to 15% - and setting up a JV dubbed Leapmotor International.
Since then, Leapmotor, part of a new crop of nimble Chinese vehicle makers that include Xiaomi Corp, has started offering three models across Stellantis' European distribution network, placed alongside Citroen C3s and Fiat 500s.
After starting some initial assembly in Poland, the company plans to make vehicles this year at Stellantis' Zaragoza site in Spain.
A more extensive pact with Leapmotor would come as Stellantis is regrouping from market share losses in the US and Europe.
CEO Antonio Filosa, who took over in June, is set to reveal next strategic steps at a capital markets day in May, after unveiling the worse-than-expected charges that pushed shares down 25% on Feb 6.
The company is reaping some early payback from last year's pledge to invest some US$13 billion (RM50.5bil) in the US, its biggest profit pool led by the Jeep, Ram and Dodge brands.
For Europe, next steps are less clear with factories struggling from overcapacity and tough competition crimping returns.
