When Antonio Filosa took the reins of global automaker Stellantis a year ago, the company was in free fall: Sales were plunging, factories were vastly underused and profit was evaporating.
Yet one piece of Stellantis’s struggling business gave a glimmer of hope for Filosa: a partnership with an obscure Chinese automaker called Leapmotor.
Stellantis in 2023 became the largest shareholder of Leapmotor, and the two launched a joint venture to sell the upstart’s cars all over the world. The alliance has since been a rousing success that gave Filosa a boost during a period of disarray. Last September, he even boasted that Leapmotor was outselling Chinese giant BYD in large European countries such as Germany.
Last week, as part of Stellantis’s $70 billion turnaround strategy rolled out to investors, Filosa announced a plan to take the Leapmotor deal to the next level: The Chinese company’s cars will help keep Stellantis’s largely underused European factories humming for years.
“Leapmotor has been a very good thing that the team—the previous team, but also the current team—has been able to deliver for Stellantis,” Filosa said recently at the company’s headquarters.
By investing in and forging partnerships with automakers such as Leapmotor, Stellantis hopes to make better use of vacant factory space, which will keep fixed costs down, and take advantage of Chinese know-how for electric and hybrid cars. Stellantis is currently only using 60% of its total factory capacity in Europe.
The deal reflects a new way of thinking for the automotive industry. Faced with losing ground to fast-growing, technologically advanced and cheaper Chinese upstarts around the world, some automakers are choosing to join with them instead of trying to beat them.
Leapmotor has developed into one of the fastest-growing Chinese car brands. In 2025, it sold nearly 600,000 vehicles, more than doubling from the prior year, and made its first annual profit, according to a company filing.
In markets like Europe, Leapmotor sells everything from an electric compact city car, which can be leased for the equivalent of $58 a month, to larger hybrid and electric sport-utility vehicles. Its lineup undercuts competitors from brands such as Volkswagen, Renault and Tesla by thousands of euros.
Stellantis said an expanded joint venture with Leapmotor into Europe would entail building the Chinese carmaker’s models at two plants in Spain.
It is doubling down on this strategy. Last week, it announced plans to form a similarly structured joint venture with state-owned Chinese automaker Dongfeng. In that deal, Dongfeng would assemble vehicles at a Stellantis factory in France.
In return, Leapmotor and Dongfeng gain several advantages. Chinese electric vehicles have faced varying tariffs in the European Union; local production would help Leapmotor bypass those duties.
Yet while such deals give Stellantis some wiggle room for now, it could still result in creating more competition for the automaker in a tightening global car market.
Filosa said Stellantis aims to sell only Leapmotor models that complement those available from Stellantis brands such as Peugeot and Fiat.
“We don’t want to compete in the same showroom for the same customer,” he said.
Moreover, Leapmotor’s long-term success isn’t guaranteed, said John Murphy, a veteran auto analyst and corporate adviser. There are dozens of auto startups in the cutthroat Chinese market, and many won’t survive, he said.
“There is still a significant question of, if you’re going to take the risk of going global with them, did they pick the right partner?” Murphy said.
When Stellantis invested more than $1 billion into Leapmotor, then-Chief Executive Carlos Tavares regularly warned about the threat to domestic car companies posed by Chinese automakers. However, he saw the joint venture as a way to give the company an edge. Other Western manufacturers such as Ford and Volkswagen are taking a similar approach.
The deal is a bright spot for Stellantis. The company endured a sharp decline under the watch of Tavares, who left the company in late 2024. Tavares’s focus on spending heavily to one day make more EVs ended in the company losing some $26 billion last year.
As part of the turnaround plan announced on Thursday, Stellantis said it would primarily focus capital investments on its Jeep, Ram, Fiat and Peugeot brands, while coming out with more affordable models in the U.S. In North America, nine of those cars will start under $40,000, the company said.
Industry observers have wondered whether the Stellantis partnership would lead to Leapmotor’s cars being sold—or even built—in the U.S. Chinese vehicles are effectively locked out of the U.S. market because of stiff tariffs and national-security concerns.
Speaking to reporters last week, Filosa said he could see Leapmotor vehicles being sold in Mexico, and possibly Canada, which has recently decided to let in a limited number of Chinese cars.
“For sure now, there is no space in the United States,” Filosa said. “We don’t see that.”
Write to Ryan Felton at ryan.felton@wsj.com and Christopher Otts at christopher.otts@wsj.com
