When Antonio Filosa took the reins of global automaker Stellantis a year ago, the company was in deep decline: sales were falling, factories were underutilized and profits were drying up.
Yet one part of Stellantis’s struggling business offered a glimmer of hope for Filosa: a partnership with an unknown Chinese automaker called Leapmotor.
In 2023, Stellantis became the largest shareholder of Leapmotor, and the two launched a joint venture to sell the upstart’s cars all over the world. The alliance has since enjoyed tremendous success, promoting Philosa in times of chaos. Last September, he even claimed that Leapmotor was overtaking Chinese giant BYD in big European countries like Germany.
Last week, as part of Stellantis’ $70 billion turnaround strategy presented to investors, Filosa announced plans to take the leapmotor deal to the next level: The Chinese company’s cars will help keep Stellantis’ largely underutilized European factories running for years.
“LeapMotor is a great thing that the team—the previous team, but also the current team—has been able to put to work for Stellantis,” Filosa said recently at the company’s headquarters.
By investing and partnering with automakers like Leapmotor, Stellantis hopes to make better use of empty factory space, keep fixed costs down, and take advantage of Chinese know-how for electric and hybrid cars. Stellantis is currently utilizing only 60% of its total factory capacity in Europe.
This deal reflects a new vision for the automotive industry. Faced with losing ground around the world to fast-growing, technologically advanced and cheaper Chinese companies, some automakers are preferring to join them rather than try to defeat them.
Leapmotor has become one of the fastest growing Chinese car brands. In 2025, it is expected to sell nearly 600,000 vehicles, more than double the previous year, and make its first annual profit, according to company filings.
In markets like Europe, Leapmotor sells everything from an electric compact city car to larger hybrid and electric sport-utility vehicles, which can be leased for as little as $58 per month. Its lineup undercuts competitors from brands like Volkswagen, Renault and Tesla by thousands of euros.
Stellantis said an expanded joint venture with Leapmotor in Europe would include manufacturing of the Chinese carmaker’s models at two plants in Spain.
It is doubling down on this strategy. Last week, it announced plans to form a similarly structured joint venture with state-owned Chinese automaker Dongfeng. In that deal, Dongfeng will assemble vehicles at the Stellantis factory in France.
In return, Leapmotor and Dongfeng receive several benefits. Chinese electric vehicles have faced differential tariffs in the EU; Local production would help Leapmotor avoid those duties.
Yet while such deals give Stellantis some headroom for now, they could also result in more competition for the automaker amid a declining global car market.
Filosa said Stellantis aims to sell only Leapmotor models that are available from Stellantis brands such as Peugeot and Fiat.
“We don’t want to compete in the same showroom for the same customer,” he said.
Moreover, Leapmotor’s long-term success is not guaranteed, said John Murphy, a veteran auto analyst and corporate consultant. There are dozens of auto startups in the fierce Chinese market, and many of them won’t survive, he said.
“There’s still an important question, if you’re going to take the risk of going global with them, have they chosen the right partner?” Murphy said.
When Stellantis invested more than $1 billion in Leapmotor, then-Chief Executive Carlos Tavares regularly warned about the threat posed to domestic car companies by Chinese automakers. However, he saw the joint venture as a way to give the company an edge. Other Western manufacturers such as Ford and Volkswagen are taking a similar approach.
This deal is a bright spot for Stellantis. The company suffered a steep decline under the watch of Tavares, who left the company at the end of 2024. Tavares’ focus on building more EVs at the expense of a single day cost the company about $26 billion in losses last year.
As part of the turnaround plan announced Thursday, Stellantis said it would focus capital investment primarily on its Jeep, RAM, Fiat and Peugeot brands, while coming up with more affordable models in the US. In North America, nine of those cars will start at less than $40,000, the company said.
Industry observers have wondered whether Leapmotor’s cars from the Stellantis partnership will be sold or even manufactured in the US, with Chinese vehicles effectively locked out of the US market due to harsh tariffs and national-security concerns.
Speaking to reporters last week, Filosa said he envisions Leapmotor vehicles being sold in Mexico and possibly Canada, which has recently decided to include a limited number of Chinese cars.
“Certainly now, there is no place in the United States,” Filosa said. “We don’t see that.”
Write to Ryan Felton at ryan.felton@wsj.com and Christopher Oates at christopher.etts@wsj.com.
