Stellantis Outwits EU Tariffs, Starts Production Of Cheap Chinese EV In Poland

Both the United States and the European Union recently decided that the best way to tackle the influx of subsidized Chinese electric vehicles and EV technology is by taxing the hell out of them.

But Stellantis, being the giant conglomerate that it is, found a way of circumventing the hiked duties on imported EVs that are set to go into effect in just two weeks: build a Chinese EV on European soil.

According to analysts at Jefferies quoted by Reuters, Stellantis started assembling the Chinese-made Leapmotor T03 at its factory in Tychy, Poland, last week, with a ramp-up expected in September.

The small, 142.5-inch long city EV is the first model to roll off the Polish assembly line as part of Stellantis’ joint venture with Leapmotor that was announced last year. The same factory builds the Fiat 500 and Alfa Romeo Junior, among others, and its main advantage over other Stellantis plants in Europe is its ability to churn out cars at a much lower cost.

Jeffries analysts, quoting Stellantis management, said that manufacturing costs at the Polish plant amount to roughly $430-$530 per car, similar to what Leapmotor is able to achieve in its home country, whereas building the same car at one of Stellantis’ factories in Italy would cost double.

It’s worth noting that the Leapmotor T03 has been on sale in some European countries prior to the start of production. According to our colleagues at Motor1 France, the small EV was available last year for roughly $21,000 and even benefitted from state incentives. In Germany, the car can be reserved without paying a deposit, with deliveries set to begin by the end of the year with a starting price of around $24,000. The same will happen in Spain and Italy. In China, the same car starts at roughly $11,000.

The pint-sized Leapmotor T03 is reportedly assembled in Europe using semi-knocked-down (SKD) kits shipped from China, which allows Stellantis and the newly-formed Leapmotor International joint venture to expedite operations and put cars on the road faster than manufacturing components locally and then sending them to the assembly line.

That said, Leapmotor has already started to prepare localized production of components, according to Reuters, setting the stage for a second Polish-assembled, Chinese-made EV, the Leapmotor A12 SUV, which will arrive in Europe in the first quarter of next year.

As for the T03, it’s powered by a 41.3-kilowatt-hour lithium-ion battery that feeds juice to a front-mounted electric motor that makes either 70 kW (94 horsepower) or 80 kW (107 hp) depending on the version. It has a WLTP-rated range of 174 miles on a full charge.

In the case of Leapmotor, Chinese-made EVs imported into the EU would be subject to an additional 21% tariff on top of the standard 10% rate, so it makes sense to go around these financial restrictions by putting Stellantis’ huge manufacturing power to good use. However, the pint-sized EV will have its work cut out for it on the European market, seeing how it’s bearing a brand name that very few have heard of.