Stellantis to acquire 21 stake in EV maker Leapmotor
Firms form JV to build and sell Leapmotor products outside China
Deal gives Stellantis a crucial foothold in China
Leapmotor shares tumble 10, reversing initial 11 jump

HANGZHOU, China, Oct 26 Reuters Stellantis is buying a 21 stake in Chinese EV maker Leapmotor for 1.6 billion, it said on Thursday, in a reset of its China strategy to focus on electric vehicles after years of poor sales and manufacturing pullback in the world39;s biggest auto market.

Leapmotor also announced the formation of a joint venture with Stellantis, in which the Chrysler parent will own a 51 stake giving it exclusive rights for the export, sale and manufacturing of Zhejiang Leapmotor Technology39;s products outside Greater China.

The deal, which follows a VolkswagenXpeng tieup announced in July, heralds a new era of automotive alliances in China and reflects how the country is emerging as a global centre of EV technology.

We havent been so successful in China so we prefer to rely on a Chinese partner. To win in China is better to win with a Chinese company, Stellantis CEO Carlos Tavares told a news conference in the eastern Chinese city of Hangzhou, seated beside Leapmotor CEO Zhu Jiangming.

Some analysts were sceptical that such a minoritystake taking partnership would help established foreign auto brands revive their declining fortunes in China.

Small investments that allow them access to newer technology that they39;re not able…