Leap into the unknown? Has Stellantis masterstroke turned Chinese car invasion to its advantage?

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0:40hello and welcome to another episode of the everything electric podcast uh really quite an interesting little chat today so i've been doing a lot of talking and thinking and contemplating and reading and researching about the Chinese automotive industry and the impact it's having in Europe. And then the kind of liaisons that are now beginning to happen between European firms and European manufacturers and Chinese companies. And how, you know, just it's fascinating how, in a sense, you know, Europe hasn't really got the mates that we used to have over the other side of the Atlantic. so we're kind of in a different we're kind of looking at different places how the world shifts you know i don't know why i expected it to stop shifting it's always been shifting it shifted when i was little it's shifting now or shifting long after i've gone anyway it was so it was great to get the opportunity two things three things i can do three quick things one i drove the the leap motor t03 uh earlier this year when we did the little road trip through wales with three of the smallest cheapest electric cars available in the uk and it turned out to be extraordinarily competent even though it's like designed as a little tiny city car i drove it i don't know many many hundreds of miles in the rain in the cold and it was fine brilliant wipers excellent heating uh for the last week i've had a leap motor b10 which we've filmed a review of and that will go out sooner or it's already gone out by the time you see this um which is i mean it's an SUV so it's not my favorite type of vehicle but as SUVs go oh my god incredibly energy efficient really comfortable really comfy grunt free uh in getting in and out of an old bloke really comfy back seats masses of storage and no impressive impressive car for 31 ,000 pounds UK which is like Well, you know, it's for a car like that to be that.

2:45What we're seeing is electric cars are getting cheaper than the petrol ones. And that's just going to keep going. So after all that, I then thought it's really good that we've actually managed to arrange this podcast with Damien Daly, who is the managing director of Leap Motor International, which he will explain, because it is a fascinating Leap Motor and Stellantis. Stellantis own a big chunk of Leap Motor. Leap Motor is a Chinese company. Cars are made in China at the moment, but they're about to be made in Europe as well. Really interesting story, and I really hope you enjoy it. And just before we dive into that, I just want to say, and I don't know which shows will be available, I think definitely Twickenham in the beginning of September, and obviously Sydney in September are the two big live events we've got going.

3:41But we've got lots of other things, stewing and brewing and all sorts of stuff going on. But if you're in the sort of greater London area and you want to have a go in a huge array, just staggering array of different electric cars, that's the place to come. Zero pressure, sales pressure, zero hassle. You know, it's all in one place. Same in Sydney. This time in Sydney, It's going to be the biggest show I think we've ever done anywhere. I mean, and it's a really interesting reflection of what's going on in Australia. So that's in the middle of September. That's all. Now, for the time being, let's talk the automotive industry, China, Stellantis, Leap Motor, and all things related.

4:26Please welcome Damien Daly to the Everything Electric podcast. Our three free YouTube channels on EVs and clean energy tech are funded by our fun-packed, test-drive-tastic events in the UK and Australia. Next up, Everything Electric Greater London, and then Sydney. All events include a B2B EV Day and commercial vehicles too. So Damien, thank you very much for taking the time to talk to us today. It is, I mean, it's just fascinating. I just want to say the thing that knocks me out about Leap Motor is it's only just over 10 years old as a company. You know, when you think of car companies, they're usually, you know, the ones we're all familiar with, between 50 and 100 years old.

5:14This is 10 years old and the car is amazing. Well, good to see you, Robert. Yeah, you're absolutely right. And the speed which this thing is moving at is incredible, really. So you're bang on the company was founded in 2015.

5:32The Stellantis, let me say our CEO signed the deal on the 23rd of October, 2023. And then basically, crash bang wallop within six months. So we bought 21 % of LeapMotor in China. Yes. And then within six months, formed LeapMotor International. And then within six months, then we launched in Europe and then launched in the UK. in March last year. So, I mean, it's whirlwind paced, honestly. It's incredible. Very, very exciting, I have to say. It must be. It must be an amazing business to be in because it's moved so quickly. Because there were so many things, you know, I'd heard of the brand. I'd seen a big stand.

6:12I was at Shanghai Motor Show last year. So it was very, we spent a lot of time on the Leap Motor stand. So I kind of knew, I thought I knew about it. But I even then assumed it was probably 30 or 40 years old, the company, you know, that like a few other brands in China have been around for a while. That is so sudden. And also, it's just, I'm not going to, you know, whinge on about it, whine on it, no, glow on about it, but the quality of the build of the car. I've just had the Leakmotor B10 for a week. We filmed it last week. I mean, it's a really well put together car that is really, really nice to drive.

6:49And how is it possible that a 10-year-old company, you know, well, here's a quick thing. I looked it up, Ford were 10 years old or 11 years old, I think, in 1912. Right. You know, so, I mean, and who can remember a model that Ford made in 1912? That predates the Model T, you know. It's just like, that is incredible, the speed that these things are happening. But what's super, super exciting, really, is basically the reaction time as well. So, and the willingness to listen and the speed it takes to implement change. And I think you can see the T03 was the first car. Yeah. And then, I mean, we launched rather unusually with our smallest car and our biggest car.

7:35And we all described them as bookends. And then the commitment to our retailers and the commitment to the customers was we were then going to go and fill in the gaps between our smallest and our largest over kind of the next 18 months, really. So we would have A segment through to D segment SUV. and as I say, quite unusual to have the smallest and largest. And then, you know, we launched our B10, the one you drove, so thank you so much for the feedback, which is a C-segment SUV, which is the largest in the UK. And we launched that just before Christmas. And that really catapulted us forward because with the two original cars, which we launched in the UK, we had about 33 % of the country, sorry, the model range, the customer base covered, but that immediately took us to about 75%.

8:20So, and we launched it in November, which you kind of think, well, is that a smart time to launch a car? You know, everyone's in sort of Christmas mode. And, but it was a really, really good thing because it enabled us to train our retailers, to get the dealer demonstrators on, to do the press activity. So they're literally kind of, you know, as I say, when Big Ben struck 12, rather than kind of a two week delay when everyone's on holiday and all that kind of stuff, it was like, boom, we were out and we're on the blocks. We're on television first week in January. and you know it's kind of really really forgive the pun leapt forward but um but it's been super super exciting you know it's it's um the pace is amazing um we've got new models to come as well um yeah but i think our our key moment really um when i look back um and and you know we celebrated on to put the context of your example a moment again yeah yeah we're 10 years old in the uk we're just over one year old.

9:17So we did some fun stuff with our dealers and celebrating our first birthday. But the pace things are moving is incredible and we've got so much more to come. So the blast off moment, as I was saying, was really last summer, we were the first brand to launch our own grant. So obviously it was fabulous that the UK government launched their EV grant because that's exactly what everybody wanted. Even though we weren't necessarily going to qualify, it was great because EVs were on the front page of newspapers and all of a sudden a massive interest in EVs. But if you remember, there was a bit of a hullabaloo as to what qualifies, what doesn't.

9:59And we got in very, very fast. And that's, again, super exciting because the speed which we can make decisions and the agility. And we launched. So I think they mentioned it on the... they announced it to the press. I think it was on the 15th of July. We announced our grant on the 18th and it was our blast off moment, as I call it. And we kind of haven't looked back. So it's been, it's been, whilst it's not been very long, we've crammed quite a lot of things in. So it's been super exciting. Yeah, because I drove the T03 that we did a little jaunt through Wales earlier this year. Three small affordable cars, the T03.

10:41Yeah, yeah, it was great fun. The weather was not kind to us, but it was great. But the fact is the Tier 3 was just incredibly cheap, and all three of us had a go in it. Everyone said, I think when you come across a car like that, your expectations are fairly low. So anything better than that, you go, wow. When I first left here to drive to North Wales in a car with not amazing range, I went, this is going to be an adventure. it was so easy it was so easy to i mean i had to charge it once to get to land you know that's amazing that is if you in comparison with like the first generation of electric cars like your zoe's and your leafs i don't have to charge those three or four times yes so we never i'll be honest with you we never set out to be the cheapest what we wanted as a positioning was to be the best value yeah and i think the word value is often misused in in our kind of day-to-day vocabulary really because we sort of associate it value with cheap supermarkets all this type of stuff but actually you know the true definition as we know is it's kind of like i pay x and i get y so actually it's and that value attached to what you get so actually we are the lowest priced ev with our leap grant at 14 ,495 pounds but the key thing is all that specification that you get regardless whether it was an electric vehicle or not but all that level of specification you know full uh allo wheels full sunroof you know for a large screen um adaptive adaptive cruise control so and 11 adasse features so and it's we packed a lot into actually a really uh let me say low price yeah no i think so i thought we were all blown away by it and it did the journey beautifully and i mean it did a long drive and we we picked that road because in mythologically it has the least public charging available of any road anywhere in the country you know it's not overly but but actually we won an award um for um against the range because the range we state is 165 miles right we've actually recognition for actually because the people's perception and i think this is interesting because people forget everyone talks about the kind of oh yeah well it'll be 20 30 less everyone forgets on petrol cars the same principle yes sure exactly should apply but But actually, we got recognised in the industry for actually achieving that 165, which is great.

13:13I can believe it. No, absolutely. And I mean, the thing I noticed about driving the B10, which I've done a few fairly long trips in it, is it didn't occur to me to check the range or see how far it was. I just drove it because it's a car. And I had to go from A to B. I got to B. And I went, oh, yeah, better look at the state of the battery. it was fine. I mean, that range, I don't know what the stated range is. I can't, I haven't written it down. It's 270 miles. Yeah, I mean, it's, it just is like, yeah, anyway, you know. I'm pleased you liked it and it's opportune time. Yeah, no, it's really, it looks and also.

13:53That's kind of our volume seller, Robert, to be honest with you. Right, I can imagine. No, it's amazing. But, but interestingly, when we first started the journey, we expected the T03, which we've just talked about, to be the volume product. right because and again we know we started the brand with a with a clean sheet of paper and um in the business plan we thought that would be the volume car because i see our c10 which is the biggest the dsuv if you watch it was very well priced at 36 and a half thousand pounds there's a lot of players in that kind of area in that area yeah yeah but actually the opposite kind of happened i mean we sold the 203 quite well but c10's far surpassed our expectations and and And only just in the last sort of month now, B10 has taken over.

14:38And B10 should take over because the segment is, roughly speaking, at four cars registered in the UK, three of them are a C-segment SUV. So it's the largest, largest segment. Yeah. I mean, that was because I have ranted about SUVs. But when I was in that one and I was in a traffic jam and there was about three Range Rovers, I went, oh, I'm at the same height as those people. Normally they're up there, you know. but I was so, I mean, the thing is that it's, it is a big car, but if you had a, I mean, that's what I rave about in the, in the review we've done, but I mean, if you've got a, you know, I've looked back to my, at the time I had smaller children, I mean, my kids are in their thirties now, but they, that would have been such an ideal car.

15:19The boot space is ridiculously enormous. It's just, it's got so much storage space. You know, when you, when I think back to bikes and skateboards and bags and all that stuff. The stuff you have to carry around. Yes, it would have been a very popular choice at that time. So the one that's coming then that looks really nice, is it the BO5, the kind of hatchback? Yes, so it's the B05. So we will launch this in middle of July. So we're just planning our launch activities for this almost as we speak. So we'll be on television. it's a as you say a C segment hatch really probably I'm not saying it's a sports car or a sporty car but a bit sportier really interesting shape interestingly a minute ago I was going to ask you whether you liked SUVs because a lot of people do but not everyone necessarily always wants an SUV so I think this could be interesting and And it's also got some different aspects.

16:26Like I'll have things like launch control on it. And we're trying to position this also to a wider audience, trying to attract some younger people as well. So we've got quite a cool concept, which I would love to tell you about, but I can't. And we're going to go on TV with that. We've got some really interesting things. So that will be with us. We're literally looking to book the television for the 17th of July. and then we will launch we'll also launch a range extender version of our B10 the one you've just driven which I mean let me be clear we are an electric brand first for whatever reason whoever can't quite make that leap right now so we want to be 90 % electric we're launching that in B10 we've already got it on C10 and then we will launch the B03X which is a family car in sort of mid-September time, which is really, really super, super interesting.

17:25We position our seats. You talked a moment ago when your kids were younger and the amount of clutter. So because we've got B10 and C10, sort of 4.7-metre and a 4.45-metre SUV, we positioned our C10, the biggest car, more at families, and the B03X will be in a very similar sort of vein. So we're looking to make that very much kind of to appeal to the masses. And then finally, finally, at the end of the year, which we will really commercialise next year, don't get me wrong, will be our final car of our current six car range. So we will have jumped from being two cars covering 33 % of the market when we launched in March last year to over 90 % of the market within two years, basically, having launched.

18:14And presumably you have like service centres around the country. I mean, have you actually got like Leap Motor dealerships? Because I'm trying to think of how you've seen one. Yeah, so, I mean, let's touch on this a second, because I think this is an important point. So there are lots of new Chinese brands. I mean, and there's a lot more to come. So we think we are quite unique. and in the same way I think value is often misused as a word, I think the word unique is overused. When I say we're unique, we're unique in so much as that basically, whilst Stellantis bought 21 % of Leap Motor in China, the Leap Motor International, which was formed six months afterwards, is Leap Motor everywhere in the world, external of China.

19:03Right. So now this gives us a real advantage and point of difference versus any other Chinese brand, really, in so much as basically to come back to your question about dealerships, we had dealerships almost ready-made so we could act. And it fits in with the speed I mentioned a moment ago. And like a lot of these new Chinese brands who are new to Europe, we obviously had tried and tested systems. These systems have been serving dealerships and customers for decades. I mean, some of our brands have been, you talked about the age of Ford. I mean, some of our brands like Vox, et cetera, have been in the UK for 100 odd years.

19:46So this kind of uniqueness of all the benefits that Stellantis bring us. So we actually, when we kicked off last year, we had 44 retailers. Right. And we are currently at 80. Wow. Okay. And we look to close the year close to 110. Right. So it's easier for me to tell you, which I won't because it's a bit negative, where we don't have dealers. But even that would be pretty much closed by the end of this year, really. So no one will have to travel too far, and rightly so, if they want to choose a little motor. But at the moment, as we stand today, all of our dealers are existing Stellantis dealers.

20:23Right, right. But I mean, that's the... So presumably, though, you can then train people in the service departments to be familiar with the cars. you know that's part of that process i'm guessing 100 so first of all they're familiar with selling evs in the first instance yeah so secondly we can piggyback all the systems and processes which gives us a massive advantage and then obviously clearly we need to train them specifically in the elite motor products which so we've almost almost got two-thirds of the job done before you start really so so uh yeah that i mean it's a really uh you know a good point and i think i mean obviously it's changing but there have been examples i remember helping a woman at a rapid charger in bristol i don't know what eight nine years ago who was who had just bought i'm not going to mention the brand it wasn't a sedantis brand uh just had just bought a new electric car from a dealership and they hadn't shown her how to plug in i mean the most basic thing she'd never driven electric car before so she'd driven to bristol to see her daughter at university and she couldn't get home and she was you know in tears and she said oh i can't use the fast chargers my car doesn't have that connection you know the ccs you pull out the plug she didn't know i mean the most simple thing to show so we when we showed her she but she burst into tears literally she was because she had no idea and we plugged it in for her and we paid i paid for it i thought just have some electricity you know you'll be all right and it charged her car and she was fine but that she was failing well yeah exactly she'd been on her own at the middle of the night but that failing of the sales system you know in a sense it was part of that transition where people who'd gone into car sales were probably petrol heads that loved petrol cars and then they suddenly had to deal with these weird new ones i'm assuming with my fingers crossed that that's not the case at well well so it's a really interesting discussion point so so so first of I think the handover of an electric car is, I mean, handovers are always important to them, but even more important now, simply because, I mean, even some of the non-electric cars, you know, the technology advancements are significant.

22:40You know, it's hardly anything that's analogue anymore on any car, is it? But particularly, I think, on electric cars. And I think also, you know, a lot of people have, you know, made the, taken the leap, as we like to say, from thermic to obviously electric. And what we don't want is people panicking like that lady, you know, because if she hadn't met you, it could have completely destroyed the whole experience. So we put a lot of attention onto this. In fairness, our sister brands within Stellantis already had, so we had that learning which we could benefit from. But we're also producing, because often when people get their car, they just want to go.

23:16They want to get, they want to drive. So there's a proper explanation at a point of handover, first and foremost, but we also produce some videos as well. So we're doing some short videos and some longer videos. So if someone just wants to know the five basic things that they need to know, then we've got something for that person, which obviously charging is one of those. And then if someone wants to know in more detail, then we've got longer content as well, which they can look at right because i'm sure yeah it's not going to be the same and i think also the general kind of public knowledge about electric vehicles has shifted since then it was it was all very new to her you know and now if you even if you're driving a you know a petrol car and you stop at a motorway services it's very likely you'll see the the 30 boxes that have got chargers on you kind of get you've kind of it's become a familiar sight i think isn't it has it Yeah, I mean, absolutely.

24:13But, you know, it's nice that you stepped in, and I think this is the point. I mean, most people are charging at home. Yes, exactly. It's interesting because the whole sort of, you know, can I live with an electric car and all this kind of stuff, I mean, certainly in most cases, you know, people are doing less miles than they actually really think they are and actually doing 90 % of the charging at home. I mean, I've charged publicly a couple of times, but most of the time I'm charging at home. and it's massively convenient i mean my father is an ev owner um and um i convinced him into it it was before elite motor just to be clear so that don't ask which car um and you know probably one of the few things he trusts me on is car choice and um don't mean that quite as bad as he said um he's watching um but you know and he loved it he loves it now because every time he gets in his car He's charging overnight at a really, you know, an amazing cost.

25:11You know, he's obviously retired. And every time he gets in his car, he doesn't need to visit a petrol station anymore. Yeah. And that's a big advantage. Because have you, I mean, what's become very apparent to me is, you know, in a sense, this is the wider electric vehicle topic, but I just wonder if you've felt this, that it really is this year, there's been this enormous increase in sales of electric vehicles, but just in general acceptance. I've done a couple of public talks recently where in the past, and I'm talking even five, six years ago, the questions would have been more sceptical, not necessarily hostile, but they would have been negative, and what about this, and the batteries don't know.

25:57There's none of that anymore. I don't get any of that. I don't know whether... have you felt that there's a sort of shift, a wider shift? I think there's a couple of things in this. So first of all, I think fundamentally, human beings want to do the right thing, fundamentally. I mean, obviously there are people that don't misunderstand me. But we kind of know that this is the right thing to do. What's stood in our past previously is, and certainly when I ran Fiat previously and we did our own research, is price was a prohibitive factor to move to electric. and now that kind of demonstrated by brands like Lee Motor absolutely isn't the case I think also even I think most people who are coming to the end of finance arrangements or looking to buy a new car they're asking themselves a natural question should my next car be electric so if we can catch that I think that's really opportune as well and I think also even things like the petrol crisis and stuff like this is making people think.

27:00Yeah. You know, and I think the other factor is most people now know people who have made the switch to electric. And if you speak to those people and they get endorsement and referral for the fact that absolutely their lives are almost better and, you know, kind of as a result. So I think there's a lot of aspects to it. And we're certainly seeing that, you know, people are, people are with, And another key point which we're finding, which is quite interesting, is whilst we're coupled with Stellantis brands, 95 % of the customers we're attracting as Leap Motor are new to Stellantis. So actually we're attracting new people into the dealerships as well.

27:43And as I say, we're an EV brand first and foremost. So obviously it's quite exciting. I mean, that is certainly one of the things that I was embarrassed to learn about myself because I hadn't really thought about that clearly. but you know brand loyalty i got asked in an interview you know what about are you now brand loyal to any particular mate i went no i've never been i've never done brand loyalty then they asked what was your last petrol car it was a golf what was the one before that a golf what was the one before that it's like four golfs oh god i had brand loyalty but you were loyal yeah but that's that flips doesn't i mean i think that's i've talked to numerous people in the auto industry about that, that the arrival of electric cars, people would suddenly, you know, buy a brand that they'd never even touched before.

28:33You know, it kind of threw things up in the air a bit. I think this is an interesting point. And, you know, I've read quite a few things about this. And I don't think the automotive and the electric thing is unique. I think maybe there's something in it that post-COVID. And if you look at some other industries, and whilst my wife tells me I'm too old to buy trainers now, I've always been a bit of a trainer nerd, really. And, you know, you look at, there's quite a few new sporting brands which, you know, five, ten years ago people wouldn't entertain. You know, five, ten years ago it was all about Nike, it was all about Adidas and there was a bit of Puma.

29:09Now you've got brands like On, Hooker and all these other brands which have come from nowhere. Maybe there's just a whole thing now that basically people are more open to different brands. I think if you're thinking, coming back to us in the here and the now, I think if you're thinking about electric, you probably are looking to, and you read up, and you are absolutely more open to these new brands than perhaps you ever would be before.

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30:13and I mean what about the China thing is that is that ever mentioned with customers that they go I don't know if I want a Chinese car because it will be spying on me or whatever reason or I don't want to you know there's that I mean I hear that sometimes but it's kind of not very often but it definitely is there and we I did a talk at the Cheltenham Science Festival just yesterday and one of the questions was about vehicle security from someone who works at GCHQ, but who I later spoke to who's got a Chinese car. Don't need to mention what brand, but, you know, that was quite amusing. But, I mean, I think there's a background hum story about, you know, are we totally reliant on China for everything, which we kind of are.

30:53I mean, the computers we're using to talk to each other, large amounts of the equipment in them were made in China. you know it's very yeah dominant manufacturer yeah i mean i i i we haven't had a lot of that to be honest with you and i think you're absolutely right i mean it's it's not just a car thing is it i mean um exactly i'm not an expert on the industry but i think you know the television industry has changed as well i think there's a Chinese brand which is either number one or number two and in theory you mentioned spying that'd be looking at you 24 7 so um yeah and And your phone as well, is it, you know, with you all the time?

31:28Yeah, so I don't think these are... I mean, first of all, let me be really clear to any... Also, less to you, but to anyone who's listening and watching this, is that, you know, we are 51 % Stellantis. Stellantis, we're not in this for the short term. Yeah. If you add... Even if you add together the history of our brands in the UK, you're nearly 800 years. You know, we're not into any shortcuts or anything like that. So I really, if any consumer, I think the best thing, if something is on a consumer's mind, the best thing to do is for them to say it. Because at least if someone says it, you've got an opportunity to respond.

32:05And I think these things, I'm sure somebody worries about these types of things, but I think, you know, it's really not the case. And so we've got, again, that's the USP versus an unknown Chinese brand. And I think some of these Chinese brands, the consumer is naturally kind of thinking, well, is this brand still going to be here in five years? A lot of them are giving long warranties. Are they going to be here at the end of the warranty? I mean, we absolutely will because we've got the backing of, you know, Stellantis being the fourth largest manufacturer, which is, I think, super, super important.

32:42And again, absolutely, as of today, is unique in the industry. It's also, I mean, I was very pleased to see that, I think it's Zaragoza, isn't it? There's a factory that, is it open yet or it's being developed to manufacture LeapMotors within Europe? It's going to open super, super fast. And going back to the thing we talked about earlier, you know, it's in actual fact LeapMotor, and in terms of that speed and speed of implementation, we already started to manufacture, it's actually started and stopped, which gives an example of how quickly they can turn on and turn off depending on demand. So we already started to manufacture T03 in Poland for a specific time.

33:23So we were the first to do it. We obviously made the investment in Spain. And I think, again, this is the USP of the relationship with Stellantis, is massive global manufacturing footprint and gives the combination of the two massive options to both Stellantis and also to Leap Motor. So we don't need to look outside, really. Yes. No, I mean, so effectively, I mean, that's, you know, I'm cantering my own comment about the Chinese, you know, there's a Chinese element to it, but actually at some point, it's very likely the car you buy will be actually made in Europe somewhere or, you know, and the parts will be much more, I mean, it makes economic sense, doesn't it, to make, to not have to ship cars right around the world.