Chinese electric car manufacturer Zero Sports Car has launched its first car for the international market, called the C10.
Arjun Kapoor | CNBC
star Said Thursday it would invest 1.5 billion euros ($1.58 billion) in Chinese electric vehicle startups Leap cartraditional automakers are looking for ways to compete in China’s fiercely competitive market.
The two companies will form the Leapmo International joint venture, aiming to promote the sales of Chinese brand electric vehicles overseas. Stellantis will hold a 51% majority stake in the joint venture.
Stellantis, which owns Chrysler, Maserati and other brands, said the investment will give it about 20% of Zero Sports Cars and two board seats.
China is the world’s largest electric vehicle market, dominated by domestic companies BYDand U.S. automakers Tesla.Competition among domestic new companies is increasingly fierce Nioh, Xpeng and ideal carand tech companies like Millet Huawei has also joined in.
Traditional car companies are believed to have been too slow to transition to electric vehicle manufacturing, hampering the potential growth of the Chinese market. Stellantis’ car sales in China have been struggling, accounting for only 0.3% of the market, according to the company’s official data.
Counterpoint Research analyst Abhik Mukherjee told CNBC: “The deal has clear synergies for both Stellantis and Zero Sports Car. Stellantis will benefit by strengthening its presence in the Chinese market, while Zero Sports Car can more easily to enter the European market.” via email.
Stellantis eyes China’s development
By being led by a local partner, the deal is likely to boost Stellantis’ growth in China.
Stellantis CEO Carlos Tavares said in a press release on Thursday: “Through this strategic investment, we can address the gaps in our business model and start from zero to start the automotive market in China and overseas. benefit from competitiveness.”
Like many Chinese electric vehicle startups, Zero Sports Car has been working hard to position itself as a technology-first brand. The company develops its own semi-autonomous driving system and the architecture on which its cars are built. Hangzhou-based Zero Sports Cars is also building its manufacturing capabilities.
The Chinese company currently has three cars on sale and plans to launch different models in the coming years.
For Stellantis, Thursday’s deal gives it access to the Zero Roadster’s technology and manufacturing footprint, helping the European company boost sales in China.
Zero sports car aims at rapid overseas growth
The move could support Zero Sports Car’s ambition to become a global electric vehicle manufacturer. last month, The company participated in the IAA Motor Show in Munich, a high-profile European automotive event, where it launched the C10 sport utility vehicle. The automaker said at the event that it plans to launch five “global-ready” products around the world over the next two years.
“All subsequent products of Zero Sports Car will be designed and developed with global thinking and follow global standards.” Zhu Jiangming, CEO of Zero Sports Car, said at the press conference at the time.
An international joint venture with Stellantis could help Zero Sports Cars sell cars overseas. The two companies said the joint venture has the exclusive rights to export, sell and manufacture Leapmotor products outside Greater China. Vehicles from the joint venture will begin shipping in the second half of 2024.
Counterpoint’s Mukherjee said Chinese car companies face the challenge of “building consumer trust and building strong dealer networks” in Europe. The deal could help Zero Coupe expand into Stellantis’ network, “potentially allowing for sales under the Stellantis brand.”
Still, deals between traditional automakers and Chinese companies haven’t always gone smoothly, casting a pall on Strantis’ huge investment.
“Foreign automakers have realized that China is leading the race for an electric future. While deals may be struck to regain key technologies, the success of such partnerships – especially minority stakes like this one – in the automotive sector Bill Russo, CEO of Automobility, an investment advisory firm with a poor track record, told CNBC.
Last year, Stellantis’ joint venture with Guangzhou Automobile Co. to make Jeep products in China filed for bankruptcy.
Chinese players step up pressure
Chinese companies, including Warren Buffett-backed BYD, are aggressively expanding into Europe, Challenge the world’s largest car manufacturers like Mercedes and BMW on their home turf.
This has caused concern among European carmakers and politicians.
Last month, the European Commission, the EU’s executive arm, launched an investigation into subsidies to Chinese electric car manufacturers.
Stellantis Chief Executive Tavares has been critical of the entry of low-cost Chinese cars into Europe in the past. However, he said on Thursday that the Zero Sports car deal could help the automaker benefit from the expansion of Chinese companies.
“China’s offensive can be seen everywhere,” Tavares said at a news conference in Hangzhou, China, according to Reuters. “With this agreement, we can benefit from it instead of becoming victims.”
He added that Stellantis was not a “Trojan horse” for zero sports cars to enter Europe and criticized the EU investigation.
“We like competition. Launching an investigation is not the best way to resolve these issues,” he said, according to Reuters.
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