Fiat and Jeep owner Stellantis’ CEO follows Chinese route to avoid EV tariff ‘trap’

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Carlos Tavares, CEO of Stellantis, a major investor of EV maker Leapmotor, said the best way to compete is to ‘try to be Chinese ourselves’

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Reuters

Published: 3:35pm, 26 Sep 2024

Carmaker Stellantis wants to adopt the low-cost mindset of Chinese electric vehicle (EV) makers, despite the European and United States tariffs that chief executive Carlos Tavares lambasts as anticompetitive.

But the world’s No 4 automaker must navigate trade barriers on both sides of the Atlantic if it wants to succeed.

Tavares calls tariffs a “trap”, arguing that these will hurt legacy automakers by shielding them from the reality that Chinese rivals make EVs for about a third less.

The best way to compete is instead to “try to be Chinese ourselves”, Tavares said at a Reuters Events conference in Munich in May.

That belief led Stellantis to purchase a 21 per cent stake in Chinese EV maker Leapmotor last October, creating a joint venture giving Stellantis access to Leapmotor technology and exclusive rights to produce its EVs outside China.

A general view of an electric vehicle production line at the Leapmotor factory in Jinhua, a city in eastern Zhejiang province, on September 18, 2024. Photo: AFP

The challenges faced by Stellantis in the European Union and the US are no different than those confronting all automakers, as they seek to compete with the Chinese globally. However, Stellantis and a handful of others have taken it a step further, establishing partnerships with Chinese automakers to stay competitive.