The world's fourth-largest automotive group, Stellantis, is in talks with Leapmotor to collaborate on vehicle manufacturing and revitalize idle factories in Canada.

Leapmotor electric vehicles or may move into the North American market.

On April 1, Bloomberg, citing people familiar with the matter, reported that Stellantis, the world’s fourth-largest automaker, is discussing with Chinese automaker Leapmotor Technology the possibility of producing electric vehicles in Canada.

The negotiations currently focus on a currently idle complete vehicle assembly plant of Stellantis in Brampton, Ontario, Canada, with both sides exploring producing Leapmotor-branded electric vehicles at that plant through a joint venture.

If the negotiations ultimately reach an agreement, this would become the first major Chinese automaker joint-venture investment in Canada since the country cut electric-vehicle tariffs against China. Earlier, at the end of February, Xinhua News Agency reported that, to implement important consensus reached by leaders of China and Canada, both sides made specific arrangements to properly address trade and economic issues in areas such as electric vehicles, steel, and aluminum, as well as agricultural and water products.

However, the report said the potential deal faces pressure. Canadian unions and local auto-parts suppliers are taking a reserved stance toward the cooperation, insisting on full-process local assembly.

Canadian Minister of Industry Melanie Joly confirmed that the government and Stellantis are conducting the relevant talks, and made it clear that any new investment must first prioritize using local supply chains and meet labor standards. However, her statement did not mention Leapmotor or any Chinese company by name.

Stellantis idle plant

The Canadian Brampton vehicle-assembly plant is located in the Greater Toronto area, with about 3,000 union workers.

Previously, Stellantis had promised to produce a new Jeep sport utility vehicle at that plant, and thousands of workers had been waiting for years. However, after Trump announced last year tariffs on foreign cars, Stellantis canceled the plan and shifted production of that SUV model to plants in the United States.

That decision sparked strong dissatisfaction from the Canadian government, which had threatened to reclaim the millions of Canadian dollars in government subsidies it had previously given Stellantis. After that, Stellantis continued negotiations with Canadian Industry Minister Joly on the future direction of the Brampton plant.

Sam Fiorani, vice president of the auto-industry forecasting firm AutoForecast, said Stellantis originally considered producing future Chrysler products in Brampton, but that plan is now very likely to be moved to Illinois. He said:

Either Stellantis partners with companies like Leapmotor to produce vehicles at this plant, or it sells the plant to new manufacturing companies from China—those are the two most likely outcomes.

In 2023, Stellantis acquired a 20% stake in Leapmotor Technology. A year later, the two sides established Leapmotor International, a joint venture focused on the global production and sales of electric vehicles.

Currently, Leapmotor International plans to start production of Leapmotor electric SUVs at the Stellantis plant in Spain later this year. The plant is adjacent to a large battery plant built by Stellantis in cooperation with CATL.

In addition, the two sides also plan to produce electric vehicles in Brazil and Malaysia, but in the initial stages, these two projects will rely on the “knockdown kits” model—that is, the vehicle body is completed in China and then shipped overseas for final assembly.

Citing people familiar with the matter, the report said it is still unclear whether Stellantis’s negotiations can replicate this model. The talks are still at an early stage, and no decision has been made yet.

Concerns from Canadian unions and suppliers

According to the report, the Canadian Union of the workers at the Brampton plant wants to activate Canada’s local supply chain. Lana Payne, the union’s national president, said:

Any knockdown-kits model would only employ a small number of workers, while displacing tens of thousands of vehicle assembly and auto-parts jobs.

Lana Payne emphasized that the union “fully expects Stellantis to fulfill the commitments it made regarding products from the Brampton assembly plant and the jobs there.”

Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association, said that any production in Brampton “must be full-process vehicle assembly using local suppliers—this has been the plant’s consistent practice since 1962.” Volpe said:

Knockdown kits might work for Brazil, but they are not suitable for hundreds of Canadian auto parts suppliers that have been waiting for the factory to restart.

At an event on Wednesday evening, Industry Minister Joly said that the conditions for the Can(n)ie government include high-quality jobs, strict labor standards, software security, and sourcing local parts, and she specifically named three Canadian leading parts companies—Linamar, Martinrea, and Magna—saying “localization is a fundamental requirement.”

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