In a surprising move, Stellantis is contemplating a partnership with its Chinese partner Leapmotor to produce electric vehicles at the currently inactive Brampton plant in Ontario. This facility, intended to be a hub for Jeep production, was backed by over $500 million in Canadian government subsidies, as reported by Bloomberg.
This unexpected plan has met immediate resistance from Ontario Premier Doug Ford and the Unifor union, which is advocating for the 3,000 former employees of the plant.
From Jeep to Leapmotor: The Journey
The Brampton plant has been dormant for over two years since Stellantis initially pledged to retool it for electric Jeep Compass production. This was part of a $3.6 billion investment in Ontario, supported by more than $529 million in federal subsidies under Canada’s Strategic Innovation Fund. The agreement obligated Stellantis to sustain an average of 4,475 full-time jobs in Canada and maintain plant operations till December 2035.
However, in October 2025, Stellantis shifted Jeep Compass production to Illinois, citing unfavorable US tariffs that made cross-border manufacturing financially unviable. As a result, Canada’s Industry Minister began a dispute resolution process to recuperate some of the subsidies, leaving Brampton inactive since then.
Instead of Jeeps, Stellantis now proposes to collaborate with Leapmotor, a company it invested €1.5 billion (~$1.6 billion) in during 2023, forming a joint venture named Leapmotor International for selling Chinese EVs globally. The plan involves assembling vehicles from “knock-down kits” shipped from China, a practice already in use in Mexico and Brazil.
Strong Opposition from Ontario and Unifor
Ontario’s government and the Unifor union have voiced strong opposition to the proposal. According to the Globe and Mail, Unifor confirmed that Stellantis directly proposed the Leapmotor arrangement to them.
Premier Doug Ford labeled the proposal “unacceptable,” arguing that the knock-down kit model would employ significantly fewer workers than a traditional assembly plant and exclude Canadian parts suppliers. Unifor National President Lana Payne expressed similar concerns, stating, “This is not a proposal for assembly and manufacturing. It’s knock-down kits and it’s a huge problem.”
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, warned that adopting Chinese knockdown kits could marginalize hundreds of Canadian auto parts suppliers.
The economic implications are significant. Traditional assembly plants like Brampton support thousands of direct and indirect jobs through the parts supply chain, whereas CKD operations primarily benefit the country of origin, in this case, China.
The Canada-China EV Tariff Context
This proposal arises against a backdrop of changing tariffs. In January, a deal between Prime Minister Mark Carney and Chinese President Xi Jinping reduced Canada’s tariff on Chinese EVs from 100% to 6.1%. This agreement allows for an initial import cap of 49,000 Chinese EVs, increasing to 70,000 over five years, in exchange for China lowering tariffs on Canadian agricultural products like canola.
This deal opens the Canadian market to Chinese automakers, with Stellantis potentially leading the charge. Should the Leapmotor assembly plan proceed, it would symbolize the first significant Chinese automotive investment in Canada following this agreement.
However, the United States has made it clear that it would oppose Chinese vehicles entering its market via Canada. Tariffs as high as 100% have been suggested by former President Trump if Canada strengthens ties with Chinese auto companies. US Senator Bernie Moreno has also proposed expanding bans on Chinese vehicles to include those with Chinese-origin software, describing Chinese cars as a “cancer.”
Any vehicles assembled at Brampton using Leapmotor kits would likely face heavy tariffs if exported to the U.S., restricting sales to Canada’s smaller domestic market.
Stellantis’ Increasing Reliance on Leapmotor
Stellantis spokesperson LouAnn Gosselin stated the company is “actively evaluating future programs for Brampton, with the objective to ensure that any investment decision is sustainable,” without confirming or denying the Leapmotor talks specifically.
Stellantis is seeking to reduce EV production costs across its brands, with Leapmotor technology playing a key role in this strategy. The Chinese automaker has delivered over 100,000 vehicles per quarter for four consecutive quarters, including the Leapmotor A10, a $9,500 crossover identified as the type of affordable EV Stellantis needs in North America.
Nevertheless, the difference between utilizing Leapmotor’s technology within Stellantis brands and assembling Chinese knock-down kits in Canada is substantial. The former could generate lasting industrial value, while the latter might be seen as merely a workaround to avoid tariffs with minimal local job creation.
Original Story at electrek.co