Stellantis Abruptly Halts Leapmotor EV Manufacturing in Poland Due to Tariff Disputes | Carscoops

      Stellantis holds a 51% stake in its joint venture with Leapmotor, yet China has instructed automakers to cease substantial investments in EU nations supporting the tariffs.

      Poland was among the EU states that endorsed additional tariffs on Chinese electric vehicles.

      The Chinese authorities have directed automakers to halt large investments in Europe.

      Stellantis has indicated that it is currently assessing various production options.

      In a bid to keep pace with the global shift towards electrification, Stellantis invested $1.6 billion in Leapmotor in 2023, acquiring a 21% share in the Chinese electric vehicle manufacturer. This partnership allows Stellantis to sell Leapmotor cars across Europe. However, despite its initial potential, the collaboration has faced its first significant challenge.

      A Stellantis facility in Tychy, Poland, had been producing the small T03 electric vehicle for the European market, but the local production of this model abruptly ceased on March 30. Stellantis has not provided a reason for this, but unnamed sources indicate there are no plans to restart T03 production in Europe.

      This situation is unfortunate for Stellantis, as just last November, it had abandoned plans to manufacture a second Leapmotor EV at the same Polish plant. Meanwhile, Leapmotor vehicles imported from China continue to be subjected to a 21 percent tariff in the EU.

      Political pressures, tariffs, and unexpected changes have affected the situation.

      The connection between this halt in production and China's reaction to EU trade policies is difficult to overlook. In October, the Chinese government instructed its automakers to pause significant overseas investments in countries that supported the EU's new tariffs on Chinese-made electric vehicles. Poland was one of the ten nations that voted in favor of these tariffs, with another twelve EU members abstaining and five, including Germany, voting against them, as reported by Reuters.

      Given the timing, it appears likely that Leapmotor's withdrawal from Poland was influenced, at least in part, by political pressure from Beijing. The circumstances suggest as much.

      Despite the halted production, Stellantis maintains that it is not retreating from its investment in Leapmotor. Through its joint venture with the Chinese company, Stellantis retains a controlling 51% stake, which grants it exclusive rights to produce, sell, and export Leapmotor electric vehicles beyond China's borders.

      “While the company remains fully engaged in the launch of Leapmotor vehicles in Europe, it is currently evaluating various production options,” Stellantis stated recently.

      These options may now extend to Spain. According to the German publication Handelsblatt, Spain's choice to abstain from the EU tariff vote could enhance its political viability as a location for future production. The report suggests it could become the new manufacturing site for Leapmotor’s upcoming B10 electric crossover.