Strantis, the world's fourth largest automobile group, is negotiating with Leapmotor to cooperate in car manufacturing and revitalize idle Canadian factories.

# Bao Yilong

Source: Wallstreetcn

According to Bloomberg, negotiations are currently focused on an idle vehicle assembly plant owned by Stellantis in Brampton, Ontario, Canada. The two sides are exploring a **joint venture** to produce **Leapmotor** electric vehicles at the facility. If a final agreement is reached, Leapmotor EVs would enter the North American market, and the deal would mark the first major Chinese automotive joint venture investment in Canada since the country reduced tariffs on Chinese electric vehicles.

### Leapmotor EVs Could Enter North American Market

On April 1, Bloomberg News reported, citing people familiar with the matter, that **Stellantis NV**—the world's fourth-largest automaker—is in discussions with Chinese EV maker **Leapmotor Technology** about producing electric vehicles in Canada.

The talks center on Stellantis' idled assembly plant in Brampton, Ontario, where the companies are considering a joint venture to build Leapmotor-branded EVs.

Should the negotiations conclude successfully, this would represent the **first significant Chinese automotive investment in Canada** since the country lowered tariffs on Chinese electric vehicles. As reported by Xinhua News Agency in late February, concrete arrangements were made to properly address economic and trade issues in sectors including electric vehicles, steel and aluminum products, and agricultural and aquatic products, implementing important consensus reached by the leaders of China and Canada.

However, the potential transaction faces headwinds. Canadian labor unions and local parts suppliers have **reservations about the partnership**, insisting on **full local assembly**.

Canada's Industry Minister **Melanie Joly** confirmed the government is holding discussions with Stellantis, stating explicitly that any new investment must **prioritize local supply chains and meet labor standards**. Notably, her statement did **not** mention Leapmotor or any Chinese company by name.

### The Idle Stellantis Plant

The Brampton Assembly Plant, located on the outskirts of Toronto, employs approximately **3,000 unionized workers**.

Previously, Stellantis had committed to building a new Jeep SUV at the facility, a project thousands of workers had awaited for years. However, after former President Trump announced tariffs on foreign automobiles last year, Stellantis **scrapped the plan** and shifted production of the SUV to a U.S. plant.

The decision sparked **fierce backlash** from the Canadian government, which threatened to **claw back millions in government subsidies** previously granted to Stellantis. Since then, Stellantis and Minister Joly have held ongoing talks about the future of the Brampton plant.

**Sam Fiorani**, Vice President of AutoForecast Solutions, believes Stellantis had originally considered producing future Chrysler models at Brampton but will likely move that plan to Illinois. He stated:

> "Stellantis' two most likely outcomes are to partner with a company like Leapmotor to build vehicles at the plant or sell the facility to an emerging Chinese manufacturer."

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

Leapmotor International plans to begin production of Leapmotor electric SUVs later this year at a Stellantis plant in **Spain**, located adjacent to a large-scale battery factory jointly built by Stellantis and **CATL**.

Additionally, the partners intend to produce EVs in **Brazil and Malaysia**, though both projects will initially rely on a **knockdown (CKD) kit** approach—where vehicle bodies are completed in China and shipped overseas for final assembly.

According to sources cited in the report, it remains unclear whether the Stellantis negotiations can replicate this model. Discussions are in the **early stages**, and **no decisions have been made**.

### Concerns from Canadian Unions and Suppliers

The Canadian labor union **Unifor**, which represents workers at the Brampton plant, is pushing to revitalize Canada's local supply chain. **Lana Payne**, National President of Unifor, stated:

> "Any knockdown assembly model would employ only a handful of workers while replacing tens of thousands of vehicle assembly and auto parts jobs."

Payne emphasized the union "fully expects Stellantis to uphold its commitments to products and jobs at the Brampton Assembly Plant".

**Flavio Volpe**, President of the Automotive Parts Manufacturers' Association of Canada, said any production in Brampton "must be full-vehicle assembly using local suppliers—the same practice the plant has followed since 1962". Volpe added:

> "Knockdown assembly might work for Brazil, but it's not suitable for the hundreds of Canadian auto parts suppliers waiting for the plant to restart."

At an event Wednesday evening, Minister Joly outlined the Carney government's conditions: **high-quality jobs, strict labor standards, software security, and local parts procurement**. She specifically named three Canadian parts giants—**Linamar, Martinrea, and Magna**—stating "localization is a fundamental requirement".

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