European automaker Stellantis (STLA) is in discussions to build Chinese electric vehicles at a plant it owns in Canada.
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Media reports say that Stellantis is partnering with Chinese automaker Zhejiang Leapmotor Technology to begin making electric vehicles at a Canadian plant that Stellantis had shutdown in Canada. Stellantis has a 21% stake in Leapmotor that it purchased in 2023 for $1.6 billion.
The two automakers also have a joint venture called Leapmotor International in which Stellantis holds a 51% stake. The talks for building EVs in Canada are in an early stage but progressing, according to media reports. The Chinese EVs would be manufactured at an idle Stellantis assembly plant outside Toronto.
Canada’s Chines EV Connection
The 40-year old Canadian plant was closed for retooling in 2024 and set to reopen in 2025 to produce the Jeep Compass compact SUV. However, Stellantis decided last year to move production of the Jeep Compass to a facility in Illinois after U.S. President Donald Trump imposed tariffs on Canadian goods.
Canada’s government recently struck a deal with the Chinese government in Beijing that will allow imports of Chinese EVs into the Canadian marketplace for domestic sale. The Canadian government of Prime Minister Mark Carney has received criticism for the Chinese EV imports, with critics claiming it will hurt the auto industry in Canada.
Stellantis reviving its plant to make Chinese electric vehicles within Canada could help quell the controversy, say analysts.
Is STLA Stock a Buy?
The stock of Stellantis has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on seven Buy, 10 Hold and one Sell recommendations issued in the last three months. The average STLA price target of $9.52 implies 27% upside from current levels.
