European Carmakers Align with Chinese Rivals: Opportunities and Risks for Legacy Brands

European automakers are accelerating partnerships with Chinese rivals, aiming to revitalize underutilized factories and strengthen their electric vehicle (EV) strategies. However, not all Chinese brands are eager to collaborate, with BYD opting for independent growth.

Ford is reportedly in advanced discussions with Geely to finalize a wide-ranging European partnership. Meanwhile, Leapmotor has confirmed plans to manufacture vehicles in Europe and co-develop an EV with Opel under Stellantis’ umbrella, triggering similar discussions across the industry.

Stellantis and Leapmotor Deepen Ties

In late 2023, Stellantis acquired a 21% stake in Leapmotor, deepening their collaboration. The partnership includes plans for an Opel SUV built on Chinese underpinnings, scheduled for release in 2028. Additionally, multiple Leapmotor-branded vehicles will be produced at Stellantis’ plant in Villaverde, Madrid, with ownership of the facility transferring to the Spanish subsidiary of the Stellantis-Leapmotor joint venture.

This deal benefits both parties: Stellantis gains a foothold in the EV market, while Leapmotor avoids costly import tariffs by manufacturing locally in Europe.

Ford Weighs Geely Partnership

Ford is also exploring a potential partnership with Geely for a European venture, according to reports. Stellantis CEO Antonio Filosa emphasized that the company is open to collaborations beyond Chinese brands.

“Obviously, Chinese OEMs are strong players that are coming with a lot of power to Europe … but also we might look at others. Leapmotor is a Chinese partner that we have — and we really appreciate that partnership. That’s why we took it [to] the next level but there are many things that can be done.”
— Antonio Filosa, CEO, Stellantis

Long-Term Risks vs. Short-Term Gains

While these partnerships may boost factory utilization rates and provide immediate benefits, concerns linger about their long-term implications. Julia Poliscanova, Senior Director at Transport & Environment, warns of potential risks:

“I do worry about what that actually means long-term. Once they help the Chinese brands get that brand awareness and once people get the car and see that it’s not such a bad car, I think it can be a point of no return.”
— Julia Poliscanova, Senior Director, Transport & Environment

BYD Prefers Independent Expansion

Not all Chinese brands are seeking European partners. BYD, a leading Chinese automaker, has made it clear that it prefers operating independently. Executive Vice President Stella Li stated that BYD avoids joint ventures, opting instead to manage its own facilities.

“It’s very hard to partner and ask permission from another person. We prefer to run everything on our own. We partner with every auto manufacturer to either sell the battery to them or work with them for different aspects… but not manufacturing.”
— Stella Li, Executive Vice President, BYD

BYD is reportedly in negotiations with Stellantis and other companies to acquire underused factories, reinforcing its strategy of self-reliance in global expansion.