On Feb. 19, news broke that the Stellantis group was considering producing 150,000 electric vehicles at its Mirafiori plant in Turin, Italy, as part of a deal with Chinese automaker Leapmotor. It is reported that the 150,000 vehicles will be sold by Stellantis Group's European dealers.
In October 2023, Stellantis Group signed a cooperation agreement with Leapmotor to establish a joint venture company called "Leapmotor International" with a ratio of 51:49 to promote the international development of Leapmotor products. Now, in less than 4 months, Leapmotor International's overseas factory has been announced.
As the first steps of this cross-border automotive cooperation have begun, people wonder why Leapmotor International has landed these 150,000 electric vehicles in Turin, Italy. Once the overseas production capacity plan of 150,000 electric vehicles is translated into market results, what benefits will it bring to Leapmotor?
01 The production capacity settled in Italy, and Stellantis Group used its global strategy to ensure the international landing of 150,000 Leap
According to the cooperation agreement between Stellantis Group and Leapmotor in October 2023, the two parties will establish a joint venture company to produce and sell its products with the help of Stellantis Group's existing factories and channel distributors, of which 150,000 units will be produced at the Mirafiori plant in Turin, Italy. The choice of the Turin plant as the production base is closely related to the strategy of the Stellantis Group itself.
According to the "Dare Forward 2030" strategic plan formulated by the Stellantis Group, by 2030, the Stellantis Group will sell 5 million pure electric vehicles annually worldwide. According to the data, in 2023, Stellantis Group's global pure electric vehicle sales will be 34850,000 units, accounting for only about 7% of the 2030 target. This means that in the next 6 years, Stellantis Group's new energy needs to be accelerated. Stellantis has achieved 150,000 new energy production through the Turin plant, which is an important part of its 2030 strategic plan.
From the perspective of Leapmotor International Joint Venture, according to the cooperation agreement, Leapmotor will directly have the complete empowerment of Stellantis Group's global automotive ** chain, sales channels and after-sales service, of which the first model C10 will be delivered in developed markets such as Germany, France, Italy, and Spain, and other European countries will also be launched simultaneously. In the next two years, Leapmotor will simultaneously launch five models in Europe, Asia Pacific, the Middle East, and the Americas.
It is worth mentioning that at present, the development of new energy in various regions of Europe shows regional differences, with the Northern European market being relatively more mature, followed by Western Europe, and the lowest in Southern Europe, which means that the Southern European market has the most development potential. The choice of the Turin plant to produce 150,000 Leapmotor cars is based on the Italian domestic market situation.
Back in 2018, Italy** planned to launch 1 million electric vehicles. By the end of 2023, the number of pure electric vehicles in Italy is only 22020,000 units, only about half of the plan. Throughout 2023, in order to stimulate the growth of electric vehicles, Italy** launched a new total of 9A €300 million incentive program for car purchases, in which subsidies for the purchase of each electric vehicle will range from 6,000 to 13,750 euros. In the next time, Italy's new energy vehicles may usher in explosive growth. With the launch of the production capacity plan of the Stellantis Group and Leapmotor at the Turin plant, the 150,000 units will actually translate into real sales in 2025.
According to the data, the Mirafiori plant in Turin, Italy, is not only the largest car factory in Italy, but also the electrification center of the Stellantis Group. At present, the plant is the production base of Fiat 500e and Maserati cars, and if the 150,000 production capacity of Leapmotor is added, it will help Stellantis Group achieve the goal of achieving 1 million units with Italy**, that is, by 2030, the group will achieve 1 million production capacity, and 150,000 units of Leapmotor will be added, and the idle capacity of the plant will be fully utilized.
02 International sales of 150,000 units may bring at least 935.9 billion yuan in revenue
For Leapmotor, the 150,000 units produced at the Turin plant in Italy are all sold to the global market. According to the data, the cumulative domestic sales of Leapmotor in 2023 will be 14420,000 units, up 29% y/y. If the domestic market and the international market are combined, Leapmotor will achieve sales of at least 300,000 units per year in the future, greatly enhancing its scale advantage.
In addition to the scale, the net increase of 150,000 units overseas will also bring new growth to Leapmotor in terms of revenue and profit. According to Leapmotor's 2023 third quarter report, Leapmotor's revenue in the third quarter was 565.6 billion yuan, a year-on-year increase of 294%, and in the third quarter, Leapmotor delivered 44,325 new vehicles. Theoretically, with the achievement of 150,000 vehicles, it will likely bring 19.1 billion yuan in revenue to Leapmotor International.
Based on the 49% shareholding ratio of the joint venture held by Leapmotor, Leapmotor will achieve at least 935.9 billion yuan in revenueIf the domestic and international markets of Leapmotor are combined, this means that the revenue of Leapmotor in the first three quarters alone can reach 2082.8 billion yuan, no less than rebuilding a zero run. As a comparison, Xpeng Motors' revenue in the first three quarters of 2023 was 1762.6 billion yuan, Leapmotor plus the first Leap International revenue, the total revenue will be 118 times, in terms of sales revenue will far exceed Xpeng Motors.
For Zhu Jiangming, the focus of Leapmotor's planning is not to make money blindly, but to accelerate the iteration of Leapmotor's technology and products. For the current high-end car-making new forces, Leapmotor's "high quality-price ratio" development model will open up a new situation through overseas markets and create unlimited imagination for China's auto market.
03 China's sales thinking dominates overseas and accelerates the iteration of Leaprun's "global self-development"!
In order to achieve the sales conversion of 150,000 units, in addition to relying on the production capacity and channels of the Stellantis Group, the sales idea of Leapmotor is also a strong guarantee for both parties to achieve this goal.
According to the cooperation plan, although the overseas sales rights of Leapmotor will be handed over to Stellantis Group, because Stellantis Group does not have experience in new energy vehicle sales, it still needs Leapmotor to provide sales solutions and experience. For example, online transactions, at present, Leaprun's domestic sales are basically ordered on the Leaprun app, and Leaprun can grasp direct communication channels and information, and this effective sales method will be introduced to overseas markets. In addition, including the Stellantis Group's selection of channels in the European market, all of which require the deep involvement of Leapmotor. If the image is analogous, the Stellantis Group is equivalent to the body of Leapmotor International, and Leapmotor is the brain.
Different from other new car-making forces, since its establishment, Leapmotor founder Zhu Jiangming has made it clear that Leapmotor has been using Moore's Law to build cars and insists on self-research in the whole field. The so-called Moore's law is popularly understood, that is, with the progress of intelligent technology, the hardware and software iteration speed of equipment will become faster and faster, the cost will be lower and lower, and the technology will be more and more equal.
Zhu Jiangming once said that in the era of software-defined vehicles, the iteration of intelligent technology also follows the "Moore's Law", the more people who use it, the faster the iteration of intelligent software, and the cheaper it is. Zhu Jiangming believes that in recent years, the three major systems of intelligent cockpit, intelligent driving, and vehicle domain control have accelerated iteratively, and they will evolve once in 18-24 months. When the Leapmotor C10 is actually delivered to European users, the car will be even more advanced than what you see now.
Analysts said that Leapmotor has been doing the most with the least amount of money, and in this regard, Stellantis Group and Leapmotor have a high degree of tacit understanding, which is also one of the fundamental reasons why Stellantis Group chose to cooperate with Leapmotor. With the start of production of 150,000 units, the cooperation between Stellantis Group and Leapmotor has begun to advance, one is the fourth largest automobile manufacturer in the world, and the other is the car company with the most price-to-price ratio in China.
*: Thirteen lines of cars).