EV maker Leapmotor targets European markets next fall, as exports provide ‘safety valve’ for China’s production
- Leapmotor plans to start exporting to Europe in the third quarter next year, joining domestic peers BYD and Geely in targeting overseas car buyers
- Europe is the world’s second-biggest EV market after China, and has set a ban on sale of new fossil-fuel cars starting in 2035 to combat climate change
Electric vehicle (EV) maker Leapmotor Technology plans to start exporting to Europe in the third quarter next year, joining domestic peers BYD and Geely in targeting overseas markets as production growth in China exacerbates what some have called an overcapacity.
Europe will be the first market to get Chinese-built Leapmotor EVs, sold by a Dutch-based joint venture with Stellantis, formerly Fiat Chrysler, said Wu Qiang, co-president of the Hong Kong-listed company at a press conference on Thursday, where it was also announced that the transaction of a 21 per cent stake sale to Stellantis for €1.5 billion, was completed.
The expansion into Europe is “the first step in a long march,” said Wu.
Leapmotor has not set a specific sales target, but announced that Germany, Italy, France, and Spain will be among the 10 European destinations for its cars, according to Wu.
Stellantis’ sales channels would be initially used for export of its EVs, while Leapmotor will also build a separate sales channel based on its experience in China and the market conditions in Europe, the company said. The Leapmotor C10, unveiled in Munich in September, will be the first model targeted at overseas consumers.
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According to Wu, Leapmotor’s current domestic production capacity is enough to support sales of 700,000 vehicles and it did not rule out the possibility of building an overseas production facility. It may even consider using Stellantis’ production capacity for support or partner with original equipment manufacturers.
Leapmotor was founded in 2015 by Zhu Jiangming, an electronics engineer who also co-founded surveillance giant Dahua. Investors in Leapmotor include state-owned Shanghai Electric Group and Hongshan, formerly known as Sequoia Capital China.
The carmaker’s deliveries hit an all-time high of 15,800 units in September. In the first nine months of 2023, Leapmotor delivered a total of 88,827 vehicles, up 1.4 per cent on the year.
“Exports are clearly being used as a safety valve for relieving China’s overcapacity situation resulting from the rapid shift of the market preference to NEVs [new electric vehicles],” said Bill Russo, CEO of advisory firm Automobility. He estimates that China had excess auto production capacity of about 10 million vehicles a year – equivalent to two-thirds of all North American output in 2022.
Shenzhen-headquartered BYD, which last year overtook Tesla to become the world’s bestselling EV brand, plans to build its first European car factory in Hungary, a German newspaper reported this month. Xpeng, another leading EV producer, also plans to expand to more European markets, including Germany, Britain, and France next year, its president Brian Gu said in September.
Europe is the world’s second-biggest and fastest-growing EV market after China, and is expected to see surging demand for EVs following the European Union’s announcement that it will ban the sale of new fossil-fuel cars starting in 2035 to combat climate change.
According to the European Automobile Manufacturers Association, by 2030, three out of every five cars in Europe will be electric.
