Stellantis, the multinational automotive company formed by the merger of Fiat Chrysler Automobiles (FCA) and PSA Group, has announced plans to move part of its electric vehicle production out of China and into Europe. This strategic move comes in response to new tariffs threatened by European Union (EU) regulators on Chinese-made EVs. Let's delve into the details:

 The Tariff Challenge

The European Commission, the regulatory arm of the EU, has raised concerns about China's subsidies for its domestic EV industry. As a result, they are threatening to impose significant tariffs on Chinese-made electric vehicles. These duties could be as high as 38.1% and were scheduled to begin on July 4, 2024¹.

 Stellantis' Response

Stellantis CEO Carlos Tavares outlined the company's strategy to address this challenge. Here are the key points:

1. Shift to Europe: Stellantis will relocate some of its EV production from China to Europe. By doing so, the company aims to avoid the new tariffs and maintain a competitive edge in the European market.

2. Asset-Light Approach: Tavares emphasized that Stellantis will adopt an "asset-light" strategy. This means focusing on agility and flexibility, allowing the company to adapt swiftly to changing market dynamics. Stellantis believes its approach is more robust than that of its competitors.

3. Leapmotor Partnership: Stellantis has adjusted its EV production plans with its Chinese joint-venture partner, Leapmotor. The decision to change assembly sites was driven by the higher duties imposed by the EU.

 Implications

Stellantis' move underscores the geopolitical tensions surrounding China-made electric vehicles globally. As the automotive industry continues to evolve, companies must navigate complex trade dynamics, regulatory challenges, and shifting consumer preferences.

While the exact impact on Stellantis' operations remains to be seen, this strategic shift reflects the company's commitment to staying competitive and protecting its position in the EV market.