Stellantis and Dongfeng forge joint venture to bypass EU tariffs on Chinese EVs
The non-binding agreement allows Dongfeng to manufacture electric vehicles locally, avoiding additional import duties, while Stellantis taps into Chinese supply chains and fills idle factory capacity.
Stellantis has entered into a joint venture with China’s state-owned Dongfeng Motor Group to manufacture Voyah-branded electric and hybrid vehicles within Europe. The agreement designates Stellantis’ Rennes plant in France as the production hub, with the French automaker retaining a 51 per cent controlling stake while Dongfeng holds the remaining 49 per cent. The arrangement covers the sales, distribution, manufacturing, purchasing, and engineering of Voyah vehicles, marking a significant shift in how European manufacturers are responding to shifting trade dynamics.
The deal provides a mechanism for Dongfeng to circumvent European Union tariffs on Chinese electric vehicles by producing locally. Chinese EVs currently face an additional import duty of up to 35 per cent in the EU, layered on top of the standard 10 per cent import tariff. By manufacturing within the bloc, this penalty is neutralised. This strategic pivot follows the collapse of Voyah’s original plans to launch in several EU markets, including Germany, France, Italy, Portugal, and Spain, in 2024, which were derailed by the imposition of these special tariffs.
For Stellantis, the partnership addresses a persistent operational challenge. The Rennes plant has operated well below capacity for years due to weak European auto demand, which remains below pre-pandemic levels. Currently, the facility assembles only a single high-end Citroën SUV. The joint venture allows Stellantis to monetise this underused capacity and generate revenue, while also leveraging its existing dealer network and after-sales infrastructure. In exchange, Dongfeng will manufacture Jeep and Peugeot models in China for local and global markets.
The venture also facilitates access to Dongfeng’s highly competitive Chinese EV supply chain for joint purchasing and engineering. This follows a similar back-to-back arrangement with Leapmotor, where the scope of collaboration is expanding from distribution into manufacturing, with plans to jointly build two models in Spain. The strategy is part of a broader effort by Stellantis chief Antonio Filosa to revive sales and profits at the world’s fourth-largest automaker, particularly in Europe where the transition away from combustion engines has slowed.
The agreement is currently based on a non-binding memorandum of understanding, meaning formal completion is still pending. The move highlights an ironic outcome of EU protectionist policies: tariffs designed to buy European automakers time to catch up on electric vehicle technology are being utilised by those same companies as a revenue opportunity. The central question remains whether Stellantis can stabilise its business in the short term through these partnerships without creating a competitive dynamic that threatens its own brands in the long run.
