(Corrects misspelling of Stellantis (NYSE:) and capitalizes China in paragraph 4)
Gilles Guillaume
PARIS (Reuters) – A proposed joint venture that would allow the world’s No. 4 automaker Stellantis to make and sell Leapmotor (HK:) electric vehicles outside China has received approval from Chinese regulators, according to two sources familiar with the matter.
China’s National Development and Reform Commission (NDRC) has approved the joint venture, one of the sources said, adding that the deal is still awaiting regulatory approval in other markets.
Last October, Stellantis said it was buying a 21% stake in Leapmotor for $1.6 billion, giving it a new shot at China, the world’s largest auto market by sales, and announced a joint venture.
Under the deal, Stellantis will have exclusive rights to manufacture, export and sell Leapmotor products outside of China, a first for the legacy Western automaker.
Stellantis will own 51% of the joint venture.
Last month, Stellantis CEO Carlos Tavares said the automaker could produce electric vehicles based on Leapmotor technology in Europe, North America or other markets where it needs competitively priced models to compete with Chinese EV makers.
Stellantis declined to comment. NDRC representatives could not be reached for comment.
The proposed joint venture comes amid rising trade tensions between China and the European Union, which is investigating whether Chinese electric vehicle makers benefit from unfair government subsidies.
The European Commission said on Wednesday it would begin customs registration of imports of Chinese electric vehicles, meaning they could suffer retroactive tariffs if an EU trade investigation does find they receive unfair subsidies.