Reports suggest Stellantis is considering adopting Leapmotor technology to reduce costs and improve efficiency for Fiat, Opel, and Peugeot.

IT House, February 26 — Tonight, according to Bloomberg, citing sources familiar with the matter, Stellantis is considering adopting Leap Motor’s electric vehicle technology to reduce development costs for mainstream European brands such as Fiat, Opel, and Peugeot.

Sources reveal that Stellantis is evaluating expanding its joint venture with Leap Motor to access more advanced battery and electric drive system technologies. Currently, Stellantis has sold models like the Leap C10 through its European dealership network.

Both parties hope to reach an agreement within this year. If successful, it will be the first time a Western automaker relies on Chinese car companies’ platform and software technology to develop vehicles in the European market.

Stellantis stated that the collaboration with Leap Motor aims to leverage both companies’ strengths and lay the foundation for deeper future cooperation.

This partnership will help Stellantis reduce R&D costs and enhance competitiveness against rivals such as BYD (002594), MG, Volkswagen, and Renault. Currently, Stellantis is adjusting its electrification strategy, having provisioned €22.2 billion (IT House note: approximately 179.976 billion RMB at current exchange rates) in impairment costs, and is also scaling back some battery investment projects.

Stellantis has also revived the Ram brand Hemi V8 engines and reintroduced diesel and hybrid models in Europe. The company is increasing its utilization of Leap Motor’s technology.

Meanwhile, Volkswagen is developing electric vehicles using the Xpeng platform, Audi is using SAIC technology to develop models for the Chinese market, and Renault’s new electric Twingo also leverages Chinese R&D resources.

Chinese automakers are gaining a competitive edge globally due to faster development speeds and lower costs. In 2023, Stellantis invested in Leap Motor and established a joint venture, Leap International, holding a 15% stake. Leap models are already sold through Stellantis’ European channels and are planned to be produced at a factory in Spain.

Stellantis is responding to declining market share in Europe and North America. CEO Carlos Tavares will announce a new strategy. The company previously announced a $13 billion investment plan in the U.S. and has begun to see some returns. However, fierce competition and overcapacity remain challenges in Europe.