Stellantis and Leapmotor's expanded joint venture in Spain signals move towards Europe-China hybrid production model
With Europe's OEMs focused on competing with the rapid growth of Chinese brands, automakers from both regions are looking for new ways to break into foreign markets, leading to new partnerships. The announcement of plans for Stellantis and Leapmotor to begin full-scale European production, and BMW's commitment to deeper localisation in China, highlight how serious these firms are about expanding their global supply chain presence.
The Leapmotor T03 launched in Europe in 2024 through the Chinese OEM's joint venture with Stellantis
Leapmotor
Stellantis and Leapmotor have announced their intention to significantly expand their strategic partnership, moving beyond a distribution-led model into one centred on shared European manufacturing infrastructure and vehicle platform integration. The two OEMs have announced plans to expand their joint venture into full-scale European production, with Spain's Zaragoza and Madrid plants at the centre of an ambitious EV manufacturing push.
The partnership, which began in October 2023 when Stellantis acquired an approximately 21% stake in Zhejiang Leapmotor Technology for €1.5 billion, has already demonstrated considerable commercial momentum. Their Leapmotor International (LPMI) joint venture – structured as a 51% Stellantis / 49% Leapmotor vehicle — has expanded to more than 850 points of sale and service across Europe and logged over 40,000 shipments on the continent in 2025 alone, following the 2024 launches of the T03 and C10 models.
Beyond the plant-level announcements, Stellantis and Leapmotor intend to formalise deeper cooperation in procurement. By channelling joint purchasing activities through LPMI, the partners aim to leverage their combined scale to drive down component costs, accelerate time-to-market for new models and strengthen supply chain resilience by blending Chinese new energy vehicle ecosystem efficiencies with European manufacturing capabilities.
For Stellantis, the partnership provides simultaneous access to cost-competitive Chinese EV technology, a productive use of underutilised Spanish manufacturing capacity and a route to delivering more affordable battery electric vehicles without the traditional costs of in-house platform development.
Production changes at plants in Zaragazoza and Madrid
Stellantis and Leapmotor are assessing the addition of a new line to Sellantis' Figueruelas plant in Zaragoza to manufacture Opel’s all new C-SUV BEV model. Exact timings are still under evaluation, with Stellantis considering the potential to start production of this new model in 2028, in addition to the current production of the Peugeot 208 and the Lancia Ypsilon at the plant. The Opel C-SUV would also benefit from LPMI-sourced components, which Stellantis said would "significantly enhance affordability for European customers".
And at its in Madrid, Stellantis is considering the allocation of a new Leapmotor vehicle to its Villaverde plant, potentially from the first half of 2028 – not long before production of the Citroën C4 in Madrid is set to come to an end. Stellantis also noted that the Villaverde plant's ownership is under discussion for potential transfer to LPMI’s Spanish subsidiary, saying: "Manufacturing in Villaverde would be in line with Made-in-Europe upcoming requirements and the vehicles would be commercialised by LPMI in the European and Middle East and Africa (MEA) markets."
Leadership perspectives
Stellantis CEO Antonio Filosa described the announcement as reflecting the companies’ intent to deepen their collaboration, calling it a genuine win-win that is expected to support production and advance the localisation in Europe of world-class electric vehicle manufacturing at affordable prices. Leapmotor founder and CEO Zhu Jiangming pointed to the joint venture’s rapid international growth – reaching five continents in under three years – as evidence of the partnership’s unique reach and potential.
Both companies have stressed that feasibility studies and pre-development work are currently underway under existing arrangements, with broader industrial cooperation subject to the execution of definitive agreements and customary regulatory approvals. The timeline to finalise terms has not been disclosed, but the ambition of the plan — and the scale of manufacturing capacity it involves — marks a clear escalation in what began as a minority investment just over two years ago.
The hybrid production shift
With Chinese OEMs looking to grow their presence in Europe – and vice versa for European OEMs in China – this latest announcement follows a trend of OEMs shifting towards a hybrid Europe-China production model.
Speaking at ALSC Europe in March, Tatiana Hristov, director of EMEA light vehicles sales forecast at S&P Global Mobility, identified Leapmotor as one of the emerging brands outside of China's 'Big Six' OEMs that are expected to see production volume increase by 46.8% from 2026 to 2033. This growth, she noted, is likely to be fuelled by overseas expansion and propulsion flexibility.
For European OEMs, responding to competition from China is a key focus. Speaking at an Association of European Vehicle Logistics (ECG) conference in October 2025, Klaus Zellmer, CEO of Škoda Auto, acknowledged the influx of Chinese brands in Europe but cautioned against panic.
“I’m not really worried about it as long as we’re aware of it, and I don’t believe in protectionism,” he said, recognising the opportunity that competition brings for European OEMs to sharpen their competitive edge. “I think we just need to get better. We need to get leaner, more efficient, more innovative, better quality and a better customer experience."
BMW reaffirms its commitment to localisation in China
While Chinese brands continue to explore localised production in Europe, some European brands are attempting to do the same in China. During his final quarterly conference call as chairman of BMW's board of management of BMW – before leaving the role to be succeeded by Dr Milan Nedeljković – Oliver Zipse highlighted how being on track to reach the milestone of 7 million BMW vehicles produced at its Shenyang production base before the end of the year underscores the automaker's long-term commitment to China.
"Through deeper localisation across the value chain and expanded China-based decision making, we are faster, more robust, and even more synchronised with local customer expectations and market dynamics," Zipse said.
He made reference to BMW's "close collaboration with local R&D teams and local partners in China" as critical to the development of China-specific Neue Klasse vehicles. "Think global, act local," he said. "This enables us to leverage the know-how of leading Chinese tech players and integrate local digital ecosystems and technologies to meet the specific needs of our Chinese customer needs."
