TMTPost -- French auto heavyweight Renault Group is seeking partnership with Chinese electric vehicle (EV) makers despite the European Union’s ongoing probe into China-originated EVs.

Credit：Renault

Renault has had talks with Li Auto Inc. and Xiaomi Corporation on electric and intelligent vehicle technologies at the Beijing Auto Show 2024 starting April 25. "Our CEO Luca de Meo engaged in pivotal conversations with industry leaders, including our partners Geely and Dongfeng, key suppliers but also the new players like the founders of Li Auto and Xiaomi Technology," Renault's procurement and partnerships chief Francois Provost said in a post on LinkedIn.

If talks including those at the Beijing Auto Show led to technology partnership with Li Auto or Xiaomi, or both of these Chinese firms, that would be Renault’s first collaboration with Chinese automakers engaged in EV sector. Renault already partners with China's Geely in thermal and hybrid powertrains, and collaborates with tech companies Google and Qualcomm in smart cockpits.

Renault is the third leading Europe-based auto manufacturers which is seeking partnership with Chinese EV makers in less than a year.

Volkswagen Group, the top 1 European automaker by revenue, and Xpeng Inc. Reached a framework agreement on strategic technical collaboration last July. Volkswagen that month agreed to spend about US$700 million to acquire an about 4.99% stakes in Xpeng, and completed the acquisition in December, thus becoming the third largest shareholder, next to He Xiaopeng and Alibaba Group. Volkswagen and Xpeng will jointly develop two B-class battery electric vehicles (BEV) models for sale in the Chinese market under Volkswagen brand, leveraging respective core competencies and Xpeng’s full-stack technologies, from EV platform G9 to Connectivity and advanced driver-assistance system (ADAS) software. The models are expected to start production in 2026. The parties will explore additional potential strategic cooperation in a number of areas, including collaboration on future EV platforms, software technologies and supply chain.

Stellantis NV, Europe’s second largest automobile manufacturer by sales, announced late October that it will spend 1.5 billion euros (US$1.58 billion) to acquire a stake of about 20% in Leapmotor. Leapmotor is going to issue 194.3 million Hong Kong shares to Stellantis for HK$43.8 apiece, a 19% premium to their close on October 25. Stellantis will hold around 21.07% of Leapmotor’s Hong Kong shares upon the transaction completes. The two companies are also going to set up a joint venture, in which Stellantis will own a 51% stake and have the exclusive rights for the export, sale and production of Leapmotor vehicles outside Greater China.

The joint venture is expected to begin shipments in the second half of 2024 starting in Europe, aiming to sell 500,000 units outside of China by 2030, according to Stallantis’ presentation about earnings in 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. 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, Stellantis Chief Financial Officer (CFO) Natalie Knight told analysts at an earnings call late October.

While these European auto giants are working on reinforce their presence in EV market through collaboration with Chinese peers, an anti-subsidy investigation that could result in tariffs on Chinese EV exports could dampen their EV push. The EU officially launched an investigation into EVs from China on October 4, 2023.The European Commission is set to decide whether to impose tariffs more than the current 10% standard rate for cars within 13 months once the investigation started. The possible tariff will affect not just Chinese automakers but also foreign brands that produce vehicles there such as Tesla, Renault and BMW. The move may result in tariffs close to the 27.5% level already imposed by the U.S. on Chinese EVs, Bloomberg reported last September following the European Commission President Ursula von der Leyenan’s announcing he EV probe plan. Global markets “are now flooded with cheaper Chinese electric cars”, and their price is “kept artificially low by huge state subsidies”, which is distorting European market, von der Leyen said in her state of the union stress to the European parliament on September 13.