Stellantis reportedly in talks with China to build EVs in Canada

Stellantis is in early talks with Chinese partner Zhejiang Leapmotor Technology about making EVs in Canada, potentially at its idled Brampton, Ontario plant, people familiar with the matter said.

The discussions follow Canada’s January agreement with China to reduce tariffs on Chinese-made EVs and seek new joint venture investment, though no decision has been made.

Brampton has about 3,000 unionized workers, and Stellantis had shelved plans there for a new Jeep SUV after US tariff moves, shifting the model to a US factory.

US officials have warned Canada against becoming a route for Chinese vehicles into the US, while new US rules may also affect vehicles entering the US from Canada.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Stellantis put real money behind its Leapmotor partnership

In 2023, Stellantis invested €1.5 billion for about a 21% stake in Zhejiang Leapmotor Technology (Leapmotor), locking in the partnership 1.
The deal set up Leapmotor International, a 51/49 joint venture run by Stellantis, with exclusive rights to export, sell, and manufacture Leapmotor vehicles outside of Greater China 2.
A proposed Canadian deal would let an initial quota of 49,000 Chinese EVs enter Canada over 12 months at a much lower tariff rate, if China cuts import taxes on some Canadian food products such as canola and lobsters 3.
The policy fits Canada’s plan to diversify trade by doubling non-U.S. exports over the next decade, with extra attention on Asia 4.

Western automakers may lean on Chinese EV tech to keep up

Stellantis is weighing Leapmotor’s vehicle architecture, battery systems, and electric powertrain technology for brands including Fiat, Opel, and Peugeot in Europe 5.
If it happens, it would mark the first time a large Western automaker builds its European lineup for Western markets on Chinese technology 5.
The pressure comes from Chinese brands that create new vehicles at about twice the pace of many Western rivals 6.
Plans to build in Canada for North America run into a barrier, since U.S. rules starting in 2027 would ban the import or sale of connected vehicles (cars that use internet and wireless links for features like navigation, remote access, and software updates) tied to China or Russia, which could shrink access to the U.S. market 7.