First Read: Zhejiang Leapmotor Technology "Stellantis & Dongfeng to form..."

Research evidence excerpt

First Read: Zhejiang Leapmotor Technology "Stellantis & Dongfeng to form..."

PS (UBS, diluted) (Rmb)

soon, however, how effectively Leapmotor can build its brand recognition among end UBS Cons.

consumers will determine the brand's medium term outlook in Europe. 12/26E 2.34 2.25

12/27E 3.32 3.84

Investors may be concerned on cannibalisation & execution risks 12/28E 4.14 5.08

After Leapmotor/Stellantis partnership pioneered reverse joint venture model between

Xinyu Fang, CFA

Chinese & European carmakers, the proposed Dongfeng/Stellantis JV plans showcased

Analyst

that European carmakers may opt to expand their partnership beyond one Chinese xinyu.fang@ubs.com

partner to accelerate cost optimization and EV transition. In such cases, investors may be +852-2971 8007

concerned over potential resources competition on model induction, product pricing

Paul Gong

and retail efforts. Note Leapmotor signed off to its Stellantis-led JV an exclusive right of

sales for overseas markets in 2023. Looking ahead, when new Opal models based on paul.gong@ubs.com

Leapmotor's EV technology come to market in 2028, Stellantis will also have to strike a +852-2971 7868

very fine balance in channel incentives to accommodate EV models with increasingly

different brand legacy.

Stock implications:

Leapmotor's share price derated by 20% over the last 30 days as the market price in D19

slow start and Q1 miss. Investors may react negatively on Leapmotor following the

announcement. Stellantis will hold 2026 investor day on May 21, from which we expect

to gain more visibility on the company's strategy in key markets, product pipeline and

consideration in cooperating with Leapmotor & Dongfeng.

Highlights (Rmbm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E