After losing 22.3 billion euros in 2025, Stellantis is selling idle European plants to BYD, Leapmotor, Dongfeng, and others seeking to bypass EU tariffs.
The European plant discussions are based on CnEVPost coverage and related European auto-industry reporting.
From European Autos Giant to Asset Seller
Stellantis Group, the Anglo-Italian-American automotive conglomerate formed from the merger of Fiat Chrysler and PSA Peugeot Citroen, is actively offering four European factories to Chinese automakers, marking one of the most dramatic power shifts in the history of global automobile manufacturing. The move comes after Stellantis reported a net loss of 22.33 billion euros for fiscal year 2025, driven primarily by its failed electric vehicle strategy and inability to compete with Chinese manufacturers on either price or technology.
The four factories span multiple countries. The Rennes-La Janais plant in western France is being positioned for contract manufacturing of at least one Dongfeng Motor-branded model, primarily for European market sales. In Spain, the Figueruelas plant near Zaragoza is being reconfigured for a partnership between Leapmotor and Opel to produce a new C-segment electric SUV. The Villaverde plant in Madrid, also in Spain, is under discussion for potential transfer to the Leapmotor-Stellantis joint venture company.
A fourth factory, whose specific identity has not been disclosed, is reportedly in active negotiations with BYD. BYD Executive Vice President Stella Li confirmed that the company is in discussions with Stellantis and other European manufacturers to identify suitable idle production capacity for localised European manufacturing. The breadth of Stellantis’s engagement with Chinese partners, spanning France, Spain, and potentially other countries, reflects the urgency of the group’s need to rationalise its European footprint.
Why Chinese Automakers Are Eager Buyers
For Chinese automakers, acquiring or leasing existing European factory capacity offers compelling advantages over building new plants from scratch. Factory renovation typically takes approximately one year compared to three to five years for new construction, dramatically accelerating time to market. The sites come with existing infrastructure, skilled workforces familiar with automotive manufacturing, and established supplier networks.
Most critically, local European production allows Chinese brands to bypass the European Union’s 45.3% tariff on Chinese-built electric vehicles. With local manufacturing, vehicles would be classified as European-made, subject to standard EU trade terms. This tariff avoidance alone can represent savings of tens of thousands of euros per vehicle, fundamentally changing the competitive economics in the European market.
CPCA Secretary-General Cui Dongshu noted that the arrangement benefits both parties: “Chinese automakers gain tariff avoidance and shortened time to market, while Stellantis can extract value from idle assets and reduce its fixed cost burden.” Dongfeng’s strategic planning chief Yang Yanding added that outbound manufacturing need not mean new factories, with joint ventures, capacity leasing, and equity cooperation all viable models for efficiently utilising overseas excess capacity.
Risks and the Road Ahead
Despite the apparent win-win dynamics, significant challenges remain. European labour costs are substantially higher than in China, and adapting Chinese vehicle designs to meet stringent EU safety, emissions, and type-approval regulations requires substantial engineering investment. European works councils and trade unions may resist production changes or demand extensive protections for existing workers. The cultural and management integration challenges of merging Chinese and European automotive manufacturing cultures should not be underestimated.
Stellantis CEO Antonio Filosa has positioned these partnerships as central to the group’s survival strategy, emphasising technology upgrading, supply chain optimisation, and capacity utilisation as core objectives. For the Chinese partners, the European factories represent not just manufacturing capacity but a statement of long-term commitment to the European market, potentially improving brand perception among consumers who might otherwise view Chinese brands as transient importers.
The Stellantis factory sales represent a symbolic milestone: for the first time in the modern automotive era, a major Western automotive group is systematically transferring manufacturing capacity to Chinese competitors. Whether this becomes a template for further such transactions, or remains an isolated response to one company’s specific crisis, will depend on how successfully these partnerships perform. If successful, they could accelerate the transformation of European automotive manufacturing far beyond what tariffs or trade policy alone could achieve.
Why It Matters Globally
The Stellantis factory sales are more than a corporate restructuring — they represent a structural turning point in the global automotive industry. For the first time since the modern auto era began, a major Western automaker is systematically transferring manufacturing capacity to Chinese competitors rather than the reverse. The factories in France and Spain that once built Peugeots and Citroëns for European consumers will soon produce BYD, Leapmotor, and Dongfeng vehicles instead. This shift mirrors broader economic forces: China now leads in EV battery technology, manufacturing cost efficiency, and product development speed. If the Stellantis model proves successful, it could accelerate a wave of Chinese automotive investment in European production that reshapes the continent’s industrial geography more profoundly than tariffs ever could.
Frequently Asked Questions
Which Stellantis factories are being sold or leased to Chinese automakers?
Four factories are under discussion: the Rennes-La Janais plant in western France (potential Dongfeng contract manufacturing), the Figueruelas plant near Zaragoza, Spain (Leapmotor-Opel C-segment EV SUV partnership), the Villaverde plant in Madrid, Spain (Leapmotor-Stellantis JV), and a fourth undisclosed factory reportedly in negotiations with BYD.
Why is Stellantis selling factories to Chinese competitors?
Stellantis reported a net loss of 22.33 billion euros for fiscal year 2025, driven by its failed EV strategy and inability to compete with Chinese manufacturers on price or technology. Selling idle production capacity generates cash while reducing the fixed cost burden. The company is pivoting toward a partnership model where it retains some revenue from factory assets while Chinese partners inject EV technology, supply chain efficiency, and product competitiveness.
How does local European production help Chinese automakers avoid EU tariffs?
The EU imposes a 45.3% combined tariff on Chinese-built electric vehicles. Vehicles manufactured inside the EU — even by Chinese-owned factories — are classified as European-made and not subject to these duties. For a 40,000-euro EV, tariff avoidance alone saves approximately 12,000-15,000 euros per vehicle, fundamentally transforming the pricing equation and profitability of Chinese brands in Europe.
Sources
- CnEVPost, BYD in talks with Stellantis and other carmakers to take over European factories
- Carscoops, Europe spent years locking Chinese carmakers out; now it may need them
- France 24, Selling factories to Chinese partners: risky road for European carmakers
- CNBC, Stellantis’ China play points to a wider industry gamble
