LEAPMOTOR and Stellantis completed the equity delivery on November 20.
According to the announcement, 194,260,030 newly subscribed H shares have been issued to Stellantis, and two members of Stellantis have also joined the board of directors of LEAPMOTOR.
It’s worth noting that, with the completion of the equity delivery between LEAPMOTOR and Stellantis, Dahua formally withdrew from LEAPMOTOR. Currently, Dahua no longer holds any shares in LEAPMOTOR.
The completion of equity delivery indicates that LEAPMOTOR and Stellantis confirmed their “marriage” relationship, and the two parties can make substantial progress in business afterwards.
LEAPMOTOR Co-President Wu Qiang stated that LEAPMOTOR’s going abroad is like climbing the siege ladder, yet there are still considerable challenges ahead.
At today’s media communication meeting, Wu Qiang mentioned many points about the cooperation between LEAPMOTOR and Stellantis.
Here are the most relevant points from the QA session, edited for brevity while preserving the original meaning:
The pace of LEAPMOTOR’s globalization?
Working with Stellantis is akin to building a siege ladder for overseas business, and there’s still plenty of hard work to be done.
Our plan is to start with the European market, with deliveries beginning as early as the third quarter of next year. We’ll sell our cars by exporting them, giving us an overall look at the situation. Before that, we will carry out various tasks according to our schedule.
Is LEAPMOTOR’s capital sufficient?
The highly competitive nature of our industry and the growth of the company mean that the need for capital is a constant.
LEAPMOTOR had billion cash at the beginning of the year, and 11.6 billion in the company’s account by the end of September. With the collaboration with Stellantis, we also have an income of 8.5 billion HKD.
However, LEAPMOTOR does not judge issues from the perspective of how much cash and capital it has. It’ll keep fundraising and conducting business accordingly.
Are there any plans for overseas sales channels?
In key European markets, we’ll start from more developed markets such as Germany, France, Italy, and Spain, while other countries will be rolled out synchronously.
The construction and selection of sales channels and after-sales service channels will be a combination. We’ll build a comprehensive strategy based on our brand positioning in Europe. It’s not to say that once we have Stellantis’ channels, LEAPMOTOR will leave things to others.
We had a very detailed discussion on this between both teams yesterday and the day before. We will both utilize the available channel resources and implement our successful strategies from China, including how to take customer orders and manage customer resource information.
What exactly does “delivery” mean in the completion of equity delivery with Stellantis?
The funding is in place and the two directors have joined our board, symbolizing the established commercial cooperation between us.
In short: The relationship is finalized, it’s time to get to work.
How will Leapmotor handle the challenges posed by barriers such as the European Double Resistance?
These regulatory challenges are faced by the entire industry and do not target a particular company. We have planned accordingly. Our plan involves structuring our cooperation strategically.
Firstly, we have established ‘Leapmotor International’, a joint venture in the Netherlands. Stellantis holds 51% of the shares and we hold 49%. Because Stellantis holds 51% of the shares, they should have the ability to alleviate or resolve these types of issues. Additionally, we will incentivize Stellantis to utilize its resources and increase sales.
Secondly, on the operational level, our main challenge is entering a whole new market. Although there is ample room for innovation in our cooperation with Stellantis, we also face significant challenges.
What changes have been made to Leapmotor’s management and decision making process after the entry of Stellantis to the board?
Stellantis’s board membership and shareholding did not change the equity structure, shareholder structure, or the daily operation and management of Leapmotor.
With Leapmotor beginning to export, what changes can be expected in product development?
Different countries have different product requirements such as infotainment software, maps, languages etc. We will approach suppliers like Google for assistance to meet these varying demands.
Meanwhile, our LEAP3.0 third-generation central integration electronic structure has three versions: high, intermediate, and low, catering to vehicles of various prices and sizes. Therefore, this framework allows us to adapt flexibly to demand.
So we are developing our cars not catering specifically to European or Chinese markets. Ultimately, the cars we manufacture can be sold in either the European or Chinese market.
Will the new joint venture model become a trend?
We do not anticipate this becoming a trend as every company has its own business development needs. Our cooperation with Stellantis stems from our unique circumstances and our overseas strategy.
In my opinion, every company should develop its business practice based on its individual situation.
How will you convince Stellantis to sell Leapmotor’s cars, considering that Stellantis also has its own cars to sell?
Firstly, Stellantis does not produce a product like Leapmotor’s.
Secondly, each brand under Stellantis has different positioning and there is internal competition and balance between them.Stellantis, holding 51% of the joint-venture, reaps financial rewards should LEAPMOTOR performs well in sales.
Can China’s production capacity fulfill overseas market demand?
If LEAPMOTOR’s current factory in China runs at full capacity, it can support the sales of 700,000 vehicles. Besides, if demand exceeds 700,000 in the future, LEAPMOTOR won’t plan any heavy-asset factory construction, but, instead, will use the production capabilities of Stellantis or other third parties.
Based on the above QA, amidst the ruthless elimination game in the new energy vehicle market, LEAPMOTOR has undertaken ample preparations such as overseas expansions, production capacity, and technology infrastructure.
With the continuous growth of LEAPMOTOR’s monthly sales, the brand’s recognition and acceptance are bound to gain strength, assisting the company to stand firm in the fierce competition and walk a longer path into the future.
However, the domestic market still portrays strong uncertainties, and as Wu Qiang articulated, the overseas market, having just climbed the siege ladder, still faces grand challenges.
Yet behind the uncertainties and challenges, opportunities are highly abundant. LEAPMOTOR has unquestionably seen success in terms of sales, leaving a vast space for imagining LEAPMOTOR’s future development.
This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.