21st Century Business Herald reporter Song Doudou reports
Zero Run International's products may be produced overseas.
Recently, an analyst at investment bank Jeffrey quoted the management of Leapmotor Motors as saying that Leapmotor International, a joint venture between Leapmotor and Stellantis, has started producing Leapmotor electric vehicles at Stellantis' factory in the southern Polish city of Tychy. The first batch of T03 small electric vehicles were assembled last week and will be mass-produced in September.
Jeffrey stated that Zero Run International plans to start producing the second model, the Zero Run A12, at Stellantis's Polish factory in the first quarter of 2025. In addition, Zero Run Motors has also begun preparing for localized production of components.
As of the 21st Century Business Herald reporter's press release, Zero Run Motors has not yet provided a response.
According to insiders, the Zero Run T03 will indeed be put into production in Poland and is currently in the testing phase, with plans to be taken offline by the end of September.
In fact, in March of this year, there were market reports that Stellantis Group chose its Polish factory as Zero Run's first production base in Europe, mainly for cost saving considerations. Earlier, it was rumored that Stellantis Group was considering producing pure electric models under the Zero Run brand at the Mirafiori factory in Italy, with a planned annual production of 150000 vehicles. The earliest production date is 2026 or 2027. At that time, Tang Weishi, CEO of Stellantis Group, responded by saying, "If there are sufficient business reasons, Stellantis can manufacture Zero Run cars in Italy."
The Jeffrey report points out that the production cost of each vehicle at Stellantis Polish factory is approximately 400-500 euros, similar to the production cost of Zero Run's China base, while the production cost in Italy is significantly higher, around 1000 euros per vehicle.
As part of Stellantis's investment in the Lingpao Auto deal, in May this year, the Lingpao International Joint Venture established by Stellantis and Lingpao Auto in a ratio of 51:49 shares was officially established. Except for Greater China, the joint venture company has the exclusive right to export and sell to all other markets worldwide, as well as the exclusive right to manufacture Zero Run automotive products locally.
According to the plan, Zero Run International will launch its mini car T03 and mid size SUV C10 as its overseas debut models. Starting from September this year, Zero Run products will be launched in 9 European countries such as France, Italy, and Germany. It plans to expand its sales network to 200 by the end of this year, and expand its sales network to 500 by 2026. Meanwhile, Zero Run International will also launch T03 and C10 in the Indian and Asia Pacific, Middle East and Africa, as well as South American markets starting from the fourth quarter of this year.
Wu Qiang, Co President of Zero Run Motors, once told 21st Century Business Herald reporters that Zero Run Motors will choose to export the entire vehicle or produce it locally based on economic costs. "Both models have their own advantages and disadvantages, which need to be taken into account economically. As tariffs continue to rise, the advantage of local manufacturing will gradually become apparent."
In Wu Qiang's view, the annual production capacity of Zero Run cars in China can reach 700000 units, which can fully meet the overseas export demand. Even if there is a significant increase in overseas sales in the future, Zero Run Motors will not plan to invest and build factories separately in heavy assets overseas. Instead, they will use Stellantis Group's existing factories or third parties for OEM.
Tang Weishi also told 21st Century Business Herald reporters that if they face high tariffs due to the customs requirements of the sales target country, Zero Run International will use Stellantis' global network manufacturing system and regional advantages to avoid risks.
On June 12th, the European Commission announced that additional tariffs would be imposed on Chinese imported electric vehicles starting from July, with Zero Run vehicles subject to a 21% tariff increase.
Tang Weishi stated that due to the cost changes caused by the EU's imposition of tariffs on Chinese electric vehicles, some of the electric vehicles that the group cooperates with Zero Run Motors will adjust their production locations.
The cooperation between Lingpao Automobile and Stellantis also provides a shortcut for car companies to go global. Lingpao does not need to establish production bases and sales channels overseas. In addition, Lingpao International is controlled by Stellantis Group with a 51% stake and produces at Stellantis overseas factories, which can avoid policy risks for Chinese electric vehicles in some markets and quickly occupy the market.
In addition to using Stellantis's factory in Poland to take the lead in production, brands such as SAIC, Chery, and BYD are considering producing locally in Europe to cope with the impact of high tariffs.
Last July, SAIC Group announced the establishment of its first factory in Europe. In its recent statement in response to EU tariffs, it stated, "As SAIC MG's sales in the European market continue to grow, we are planning to introduce Chinese new energy technology and green factories into Europe."
In addition, at the end of last year, BYD announced the construction of a new energy vehicle production base in Seged, Hungary, which will be completed and put into operation within three years; Chery Automobile is expected to start producing electric vehicles at its recently acquired factory in Barcelona, Spain by the end of this year, while considering building a second factory to support Chery's medium - to long-term plans in Europe, which will exceed the production capacity of the Barcelona factory.