7 months ago
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By Nick Carey, Nora Eckert and Joseph White
LONDON/DETROIT (Reuters) - Stellantis wants to adopt the low-cost mindset of Chinese EV makers despite the European and U.S. tariffs CEO Carlos Tavares lambasts as anticompetitive, but the world's No. 4 automaker must navigate trade barriers on both sides of the Atlantic if it wants to succeed.
Tavares calls tariffs a "trap," arguing they will hurt legacy automakers by shielding them from the reality that Chinese rivals make electric vehicles for about a third less.
The best way to compete is instead to "try to be Chinese ourselves," Tavares said at a Reuters Events conference in Munich in May.
That belief led Stellantis to purchase a 21% stake in China EV maker Leapmotor last October, creating a joint venture giving Stellantis access to Leapmotor technology and exclusive rights to produce its EVs outside of China.
The challenges faced by Stellantis in the EU and the U.S. are no different than those confronting all automakers as they seek to compete with the Chinese globally. However, Stellantis and a handful of others have taken it a step further, establishing partnerships with Chinese automakers in order to stay competitive.
Stellantis is making Leapmotor EVs at its Tychy plant in Poland alongside models from better-known brands Fiat, Jeep and Alfa Romeo.
Tavares says Stellantis could make Leapmotor EVs in North America.
But applying the same strategy in Europe and the U.S. is difficult because the regions have sharply different approaches to Chinese EVs and the underlying technology.
Chinese EVs are already on sale in Europe; and factories to make more are being built - with subsidies from individual countries competing for plants.
European automakers are embracing Chinese technology. Volkswagen has bought a stake in China's Xpeng to jointly develop cheaper EVs for the Chinese market.
Many auto experts see this as a blueprint for future partnerships.
"We believe many of our competitors will turn to Chinese companies ... to use their platform globally," Ford CEO Jim Farley said in July, adding the U.S. automaker will develop its own core EV technology instead.
Such partnerships are far more challenging in the United States. The Biden administration has slapped a 100% tariff on Chinese-made EVs, championed U.S. production through the $430 billion Inflation Reduction Act and targeted Chinese car components.
The U.S government now proposes barring Chinese software and hardware from vehicles on American roads, which could be its most powerful weapon yet to block Chinese EVs.
