Automaker Stellantis will begin producing EVs from Leapmotor, a Chinese brand in which it holds a 20% stake, at its Gurun plant in Kedah, Malaysia by the end of 2025.

An initial investment of €5 million (approximately US$5.35 million) will support the assembly of the Leapmotor C10 model for the local market. This initiative is part of Stellantis’ strategy to enhance its manufacturing and sales presence in Southeast Asia.

The Gurun facility currently serves as Stellantis’ production hub for the ASEAN region. It plans to expand operations to serve neighboring markets.

Leapmotor entered the Malaysian market in October 2024, shortly after launching in Thailand. The collaboration with Stellantis aims to meet the increasing demand for EVs in the region. It also seeks to broaden Leapmotor’s presence across ASEAN countries.

🔗 Source: Stellantis

🧠 Food for thought

1️⃣ Strategic timing as Malaysia shifts from imports to local production

Stellantis and Leapmotor’s manufacturing plans align with Malaysia’s approaching policy shift, as government incentives for imported EVs will expire at the end of 2025 1.

The timing is significant as Malaysian EV registrations have already doubled year-on-year in early 2025, reaching 2,160 units in February and accounting for 3.21% of total vehicle sales 2.

This investment reflects a regional trend where automakers are localizing production to maintain price competitiveness when import incentives disappear, with national brands Proton and Perodua also planning local EV models by late 2025 3.

The €5 million initial investment appears modest compared to the Southeast Asian EV market’s projected value of $60 billion by 2030, suggesting a cautious entry strategy that could scale if successful 4.

By establishing assembly operations before the incentive deadline, Stellantis positions itself to compete effectively in a market that’s expected to reach 3% of Malaysia’s total industry volume in 2025 1.

2️⃣ ASEAN manufacturing strategy follows regional success patterns

The Stellantis-Leapmotor partnership adopts Thailand’s successful model, where early local manufacturing investments helped Thailand achieve 12% BEV penetration by 2023 5.

Using Malaysia as a manufacturing hub aligns with geographical advantages, as Stellantis explicitly mentions plans to distribute to neighboring markets from the Gurun facility, similar to how Thailand’s early EV policies created a regional production center 6.

The model choice (Leapmotor C10) targets a growing market segment, as SUVs and larger vehicles represented significant portions of Malaysia’s February 2025 EV registrations, with models like Proton e.MAS 7 (580 units) and BYD Sealion 7 (387 units) leading sales 2.

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