Source: Leapmotor

Stellantis (NYSE: STLA) has proposed assembling Chinese electric vehicles at its idled Brampton, Ontario plant through its partnership with Zhejiang Leapmotor Technology (HKG: 9863), according to Unifor, Canada's largest private-sector union.

The plan would involve importing knock-down kits from China rather than full-scale local manufacturing, a model that has drawn sharp criticism from labour leaders and parts suppliers alike.

Lana Payne, Unifor's national president, said the proposal amounts to little more than kit assembly. Stellantis is proposing assembling Chinese cars using parts imported from China, with the vehicles preassembled before being shipped overseas. Payne said the approach keeps jobs in China while offering only a fraction of the employment a traditional assembly operation would provide.

Vito Beato, the local Unifor leader representing Brampton workers, called the arrangement problematic, warning it would freeze out hundreds of Canadian auto parts suppliers waiting for the plant to resume production.

The talks are at an early stage. A Stellantis Canada spokesperson declined to confirm the Brampton proposal but said the company is actively evaluating future programs for the facility, with the objective of ensuring any investment is sustainable and supports workers and suppliers long-term.

If the companies proceed, it would mark the first major Chinese auto investment in Canada since Prime Minister Mark Carney reached a trade agreement with President Xi Jinping in January 2026.

That January deal reduced tariffs on up to 49,000 Chinese-made EVs entering Canada to 6.1 per cent, down from the 100 per cent surtax imposed in 2024. The quota is set to grow to 70,000 vehicles over five years. In exchange, Beijing slashed duties on Canadian canola seeds from roughly 84 per cent to 15 per cent and removed tariffs on canola meal, lobster, crab and peas.

Source: Leapmotor

The agreement reopened a pathway for Chinese automakers to access the Canadian market, but Canadian border authorities have maintained a zero per cent tariff on auto parts only for components not classified as knock-down kits, a distinction that could complicate Stellantis's proposal.

Stellantis invested approximately €1.5 billion in 2023 (c. $1.6 billion) to acquire roughly 20 per cent of Leapmotor, a stake since diluted to around 15 per cent. The two companies formed Leapmotor International in 2024, a 51/49 Stellantis-led joint venture with exclusive rights to manufacture and sell Leapmotor vehicles outside Greater China.

The venture launched commercially in Europe in September 2024 with the T03 city car and C10 mid-size SUV, and now operates across more than 600 sales and service locations on the continent.

Source: Leapmotor

The Brampton Assembly Plant has sat idle since December 2023, when production of the Chrysler 300, Dodge Charger and Dodge Challenger ended with the discontinuation of the LX platform. The facility was originally slated for retooling to produce a next-generation Jeep Compass, backed by Ottawa's commitment of up to $529 million through its Strategic Innovation Fund toward Stellantis's $3.6 billion Ontario investment package.

That contract bars Stellantis from closing the plant before 2035. After US President Donald Trump imposed tariffs on foreign-made vehicles, Stellantis shifted Jeep Compass production to its Belvidere plant in Illinois, leaving roughly 3,000 Brampton workers in limbo.

The Automotive Parts Manufacturers' Association has stated that any vehicle assembled at Brampton should meet the 75 per cent North American content rule under the Canada-United States-Mexico Agreement. A knock-down kit approach, with components sourced almost entirely from China, would fall well short of that threshold.

Payne noted the Chinese deal compounds the impact of US tariffs on Ontario auto manufacturing, calling it a difficult situation for workers who have already been waiting more than two years for the plant to reopen.

Whether Stellantis can bridge the gap between the low-cost appeal of Leapmotor kit assembly and the local content expectations of Canadian labour, suppliers and trade rules will likely determine whether Brampton's assembly lines run again — and on whose terms.