According to sources, European automotive giant Stellantis Group is in talks with Chinese automaker Leapmotor about the possibility of producing electric vehicles in Canada.
Bloomberg, citing informed sources, reported that the negotiations are still at an early stage. If the collaboration materializes, this would mark the first major investment by a Chinese automaker in Canada since Prime Minister Carney and Chinese President Xi Jinping reached an agreement in January this year to lower tariffs on Chinese electric vehicles.
Under this agreement, the Canadian government plans to attract Chinese companies to participate in the domestic automotive industry in the form of joint ventures within three years, with an emphasis on working with “trusted partners.”
The core of the current discussion revolves around a Stellantis assembly plant in Brampton, a suburb of Toronto, Ontario. This factory has been idle for years, with thousands of employees laid off. It was originally intended to produce a new Jeep SUV.
After former U.S. President Trump announced tariff increases on imported cars, Stellantis canceled this plan last year and shifted the production of the related model to the United States. This move drew strong dissatisfaction from the Carney administration, which even threatened to withdraw millions of Canadian dollars in subsidies.
Since then, the company has continued consultations with Canadian Minister of Industry Joly regarding the future of the plant. The latest discussions have included the option of collaborating with Leapmotor to produce electric vehicles. In 2023, Stellantis acquired a 20% stake in Leapmotor and established a joint venture, “Leap International,” the following year to focus on the global production and sales of electric vehicles.
Joly confirmed that the government is in communication with businesses regarding proposals but did not name Leapmotor or any other Chinese companies. She stated that any new automotive investment would prioritize the Canadian domestic supply chain, including labor and component companies.
However, it is still uncertain whether vehicles produced in Canada by Chinese companies will be able to enter the U.S. market. The United States is advancing relevant regulations to restrict the sale or import of connected vehicles that adopt Chinese or Russian technology. U.S. Ambassador to Canada, Hoekstra, recently also mentioned that Chinese electric vehicles, even if they enter the Canadian market, “will not cross the border into the United States,” but did not specify the methods of restriction.