Stellantis eyes Canadian, Mexican production for Chinese EVs amid US political freeze

At a glance:

• Stellantis plans to build Leapmotor EVs in its idle Brampton, Ontario plant, avoiding US political barriers.
• The automaker holds a 21% stake in Leapmotor and a 51% JV to sell/manufacture its vehicles outside greater China.
• US market remains closed to Chinese-branded EVs due to bipartisan legislation and political opposition.

A Detroit automaker embraces its Chinese competitor

Stellantis, the multinational automaker behind Jeep, Ram, Dodge, and Chrysler, is making a strategic pivot that highlights the tectonic shifts in the global auto industry. CEO Antonio Filosa stated unequivocally that the company sees “space” to produce and sell Chinese-branded vehicles in Canada and Mexico, but “no space” in the current US political climate. This isn't a hypothetical: the company is actively exploring production at its dormant Brampton, Ontario facility for Leapmotor vehicles. The statement is a remarkable concession from a legacy Detroit automaker, openly discussing using its own factories to build cars designed by a Chinese rival in which it holds a significant minority stake.

The partnership structure is key to understanding the maneuver. Stellantis owns 21% of Zhejiang Leapmotor Technology and a majority 51% stake in a joint venture that grants it exclusive rights to sell and manufacture Leapmotor products outside greater China. This makes Stellantis both a traditional OEM and an authorized distributor of Chinese EV technology. Filosa framed the alliance as a two-way street: a path to grow sales in new segments, learn from Leapmotor’s engineering prowess, and share capital expenses. The “learning dimension,” he implied, is as critical as the immediate commercial opportunity, as Leapmotor’s speed to market, cost structure, and software-defined vehicle architecture represent capabilities Stellantis has found challenging to develop internally.

The Brampton path and tariff workaround

The most obvious production candidate is Stellantis’ assembly plant in Brampton, Ontario—a suburb of Toronto. The facility has been idle since the Dodge Charger and Challenger ended production in December 2023. Reporting from Bloomberg in April confirmed that Stellantis was in discussions with Leapmotor about building EVs at the site. Manufacturing in Canada provides a crucial geopolitical and economic workaround. Canada’s trade deal with China permits the import of 49,000 Chinese-made EVs annually at a modest 6.1% tariff. Building Leapmotor vehicles domestically in Brampton would circumvent even that tariff, classifying the cars as Canadian-manufactured and sidestepping the primary trade barrier for North American sales.

This strategy allows Stellantis to serve the North American market with affordable, Chinese-designed EVs while navigating the fraught US political environment. The cars would likely be sold through Stellantis’ existing dealership networks in Canada and Mexico, leveraging its established retail infrastructure. The idle Brampton plant, a symbol of the transition away from internal combustion engine models, could find new life as a hub for this Chinese-engineered EV pipeline, potentially employing workers to build vehicles for a global audience Stellantis might otherwise struggle to reach with its own platforms.

Political walls and market realities in the United States

The stark contrast in Filosa’s “space” versus “no space” assessment is a direct reading of the political landscape, not consumer demand. The US market remains hostile to Chinese-branded vehicles. More than 120 House lawmakers signed a letter urging President Trump to keep Chinese automakers out, and bipartisan legislation introduced on May 12 would ban connected vehicles and components linked to China. This legislative push creates an environment where even a major US-based manufacturer like Stellantis cannot realistically introduce a Chinese-branded EV, regardless of where it is built or the strength of underlying demand.

That demand, paradoxically, is evident. American consumers are paying an average of $49,000 for a new car, while competent Chinese EVs start below $15,000. The price gap underscores the competitive threat and market opportunity. Stellantis’ response for the US is a separate strategy: a partnership exploration with Jaguar Land Rover (JLR) for product development tailored to American tastes. “JLR is a partnership that can work very well for both parties,” Filosa noted, signaling a focus on legacy-brand revivals—like the planned Chrysler resurgence—to compete in the high-price mainstream. The company is thus playing both sides of the trade wall: Chinese engineering for permissive markets, and traditional brand equity for the fortress of the United States.

A broader Chinese EV offensive and Stellantis’ dual-track plan

The partnerships with Leapmotor and Dongfeng are not isolated moves but part of a wider industry trend. Chinese automakers are applying relentless pressure globally. BYD overtook Tesla as the world’s largest EV seller in 2025, and this week Xiaomi launched a $34,300 SUV that undercuts Tesla’s Model Y by $4,350 while offering more range. These competitors produce vehicles that legacy manufacturers often cannot match on price, battery technology, or integrated software. Stellantis’ chosen path is not head-on competition but partnership and distribution—using Chinese engineering to fill its own plants and reach value-conscious consumers.

This approach is codified in Stellantis’ new $70 billion turnaround plan, unveiled at the same investor day. The plan targets a 35% increase in North American sales, led by Ram Trucks and a Chrysler revival, with positive cash flow projected by 2027. The Leapmotor and Dongfeng alliances are the parallel, global strategy running alongside this US-centric revival. They represent a bet that the future of personal mobility—affordable, connected, and software-rich—is being defined in China, and that accessing that future requires a local partner. The Brampton plant, idle for over two years, may become the physical nexus where these two strategies converge: a Detroit shell building Chinese dreams for the Americas.

Competitive landscape and what to watch next

The competitive logic is clear, and the gap is widening. Legacy automakers are racing to catch up on electric platforms and software ecosystems. For Stellantis, the partnerships provide a shortcut to technology and scale in markets where political opposition is minimal. The immediate next steps involve finalizing the Brampton production plans and launching Leapmotor models in additional European markets, following the September 2024 debut of the T03 compact hatchback (starting at ~€18,900) and the early 2026 arrival of the B10 compact SUV (from ~€36,400).

Regulators on both sides of the Atlantic will watch these ventures closely. In the US, any attempt to circumvent tariffs or import restrictions through Canadian manufacturing could prompt further legislative action. In Europe, the Dongfeng joint venture for shared sales, manufacturing, and engineering may face scrutiny under competition law. For investors, the strategy’s success hinges on execution: can Stellantis integrate Leapmotor’s cost and tech advantages without diluting its core brand premiums? Can it manage the political optics of profiting from Chinese IP while its US workforce produces traditional trucks? The answers will determine if this dual-track approach becomes a blueprint or a cautionary tale.