Stellantis NV (NYSE:STLA, EPA:STLA), the European automotive giant behind Fiat and Citroën, is investing €1.5 billion to acquire a 20% stake in Chinese electric vehicle (EV) start-up Leapmotor.
The move aims to strengthen Stellantis's foothold in China's burgeoning EV market.
As part of the deal, Stellantis will form a joint venture to sell Leapmotor's EVs globally and will also secure two board seats in the Hong Kong-listed company.
Leapmotor, founded in 2015, has faced economic challenges and a price war, posting a net loss of US$734 million in 2022 despite a 150% sales increase.
Analysts note Leapmotor's strong capabilities in artificial intelligence (AI) and research and development. The investment comes amid increasing consolidation in China's EV sector and as foreign brands find it challenging to compete with domestic companies.