Analysis: Stellantis CEO Takes Inspiration from China to Navigate EV Tariff Challenges, According to Reuters

Stellantis Eyes Competitive Edge Through Chinese EV Strategies Despite Trade Challenges

By Nick Carey, Nora Eckert, and Joseph White

Stellantis is aiming to embrace a low-cost production approach akin to that of Chinese electric vehicle (EV) manufacturers, despite facing tariffs in Europe and the U.S. that CEO Carlos Tavares describes as anticompetitive. As the world’s fourth-largest automaker, Stellantis must navigate complex trade barriers across both continents to thrive.

Tavares views the tariffs as a detrimental "trap," suggesting that they protect legacy automakers from recognizing the competitive advantage Chinese companies have, producing EVs at significantly lower costs—around a third less, according to estimates. His proposal is to adopt a strategy that mirrors the efficiency of Chinese manufacturers rather than strictly competing against them.

In pursuit of this goal, Stellantis acquired a 21% stake in Chinese EV manufacturer Leapmotor last October, forming a partnership that will allow the company to harness Leapmotor’s technologies and gain exclusive rights to produce its vehicles outside China. Stellantis is already manufacturing Leapmotor EVs at its facility in Tychy, Poland, alongside other well-known models like Fiat and Jeep.

However, translating this success to the North American market poses challenges due to differing regional attitudes towards Chinese EVs and their technologies. While Chinese electric vehicles are already available in the European market, with new manufacturing plants under construction, U.S. regulations are much stricter. The U.S. government has imposed a hefty 100% tariff on EVs from China under current trade policies.

Stellantis could theoretically produce Leapmotor EVs in the U.S., but doing so with non-Chinese components and American labor could yield minimal cost savings. Tavares faces political challenges as well, given the heated scrutiny over projects involving Chinese technology. For example, U.S. Senator Marco Rubio has publicly criticized a Ford battery plant in Michigan that uses technology licensed from a Chinese firm.

The contrasting approaches in trade policies between the U.S. and Europe highlight the complexities within the automotive sector. While Tavares advocates against tariffs, arguing they prevent necessary market competition, some American manufacturers support them. Ford’s CEO, Jim Farley, claims that tariffs provide a necessary window for U.S. companies to enhance their competitiveness against cheaper Chinese offerings.

As the global automotive landscape shifts, China’s dominance in EV materials and components is a growing concern among Western automakers. Recent U.S. reports have pointed out the extensive support from the Chinese government to its EV industry, which further complicates the efforts of American manufacturers, prompting calls for continued protective measures.

In response to the competitive landscape, Stellantis is focusing on producing affordable models, such as the forthcoming Citroen e-C3, priced at approximately 20,000 euros. Despite setbacks in the industry’s electrification targets, Stellantis maintains its commitment to achieving 100% EV sales in Europe and 50% in the U.S. by 2030.

Industry experts stress that legacy automakers need to innovate rather than simply adopt existing Chinese technologies to compete effectively. Moshiel Biton, CEO of Addionics, emphasizes that true competitiveness will rely on innovation rather than imitative strategies, noting that merely trying to replicate Chinese efficiencies could prove counterproductive.