TMTPost -- Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technologies Ltd. is heading for EV production in Europe through its partnership with the local automaker to avoid elevated tariffs imposed by the European Union.

Credit：Leapmotor

Leapmotor International, a venture co-founded by Leapmotor and Chrysler and FIAT owner Stellantis NV, expects assembling of T03 model will start at a plant in Tychy, Poland, by the end of the year.

"We are in the preparation phase," Leapmotor International CEO Tianshu Xin told reporters earlier this week, adding that the T03 will start official production in the fourth quarter.The choice of Italy for the assembly and production work was based on "cost, quality and capacity," Xin said. No targets were given for the Tychy site.

The T03, a small five-door urban boutique commuter car, is anticipated to be assembled from kits imported from China, which is deemed as a way for Leapmotor to bypass the latest EU tariffs on Chinese-made EV imports. The proposed final duties up to nearly 47% will be subject to a vote by the EU's 27 states. If a qualified majority of 15 EU members representing 65% of the EU population votes in favor of the final regulation, the tariffs could become law by October 30 and remain in effect for five years, with the option extensions upon review.

Stellantis, the world’s fourth largest automaker by sales last year, announced last October that it agreed to spend 1.5 billion euros to acquire around a stake of about 20% in Leapmotor. The two companies also decided to set up Leapmotor International, a joint venture in which Stellantis owns a 51% stake and have the exclusive rights for the export, sale and production of Leapmotor vehicles outside Greater China.

The joint venture aims to sell 500,000 units outside of China by 2030, according to Stallantis’ presentation about earnings for the third quarter of 2023. It said Leapmotor targets sales of 1 million units annually in China in the long run, capitalizing on position as tech-led, pure-EV domestic leader.

At an earnings conference late October 2023, Stellantis Chief Financial Officer (CFO) Natalie Knight said Europe will be the first market for Leapmotor's EVs, and the venure will distribute the company’s vehicles to other global markets, with long-term exclusive distribution on cars sold outside China, said Knight. The venture also includes the option to produce Leapmotor cars in Europe to avoid potential high tariffs imposed on vehicles built in China from an EU investigation, Knight told analysts.

Leapmotor CEO Xin Tianshu revealed in May that Stellantis will begin sales of EVs from his company in nine European markets in September, including Germany, France, Italy, the Netherlands, Spain, Portugal, Belgium, Greece and Romania.

Stellantis said late July that Leapmotor International has shipped the first batch of Leapmotor EVs - a total of 800 C10 midsize SUVs and T03 cars - from Shanghai to European ports that month.

The first shipment of C10 model from Leapmotor is undergoing final checks in Italy before heading to dealers, a company representative said last week. A production plant in Europe for the C10 hasn’t yet been decided, Leapmotor International CEO Xin said.