Stellantis and Dongfeng Group have signed a strategic cooperation agreement worth over eight billion yuan (approximately €1 billion) to produce Peugeot and Jeep electric vehicles in China, marking a significant deepening of their three-decade-old partnership. From 2027, the joint venture’s Wuhan plant will initially manufacture two Peugeot ‘new energy’ models inspired by concept cars unveiled at the Beijing auto show last year, with plans to expand to four EVs under both brands. The move transforms the Dongfeng Peugeot Citroën Automobile (DPCA) facility into a production hub not only for the Chinese market but also for global exports, as Stellantis seeks to regain lost ground against domestic rivals.

Viewed from Beijing, the deal reflects a broader realignment in the global automotive industry. Western carmakers are increasingly turning to Chinese partners for access to cutting-edge electrification technology and manufacturing scale, even as Chinese EV makers themselves hunt for idled assembly plants in Europe. BYD, the world’s largest electric vehicle manufacturer, has confirmed it is in talks with Stellantis about using the European group’s dormant facilities—a sign of how the traditional pecking order is being disrupted. Analysts in Shanghai note that Chinese manufacturers are morphing into international players, leveraging their design and supply-chain advantages to erode the market share of legacy automakers.

From a European perspective, the agreement fits squarely into Stellantis CEO Antonio Filosa’s strategy of building partnerships rather than going it alone. With the group’s industrial plan due to be unveiled on 21 May, the Dongfeng deal follows a separate alliance struck earlier with Chinese startup Leapmotor. Historical context is instructive: Dongfeng still holds a small stake in Stellantis, inherited from when the Chinese group and the French state rescued PSA in 2014. Filosa has described the new venture as a way to “leverage respective strengths and introduce all-new vehicles with cutting-edge EV technologies from brands that customers worldwide trust and love.”

The implications extend well beyond this single factory. Stellantis is effectively outsourcing its EV production in China to a local partner while retaining brand and quality control, a model that could be replicated elsewhere. Simultaneously, Chinese EV makers are scouting European sites—often owned by the same legacy groups—to sidestep trade barriers and shorten supply chains. The result is a two-way flow of capital and technology that is redrawing the automotive map. Over the coming years, the Wuhan plant’s output will serve as a test case for whether such cross-border collaboration can revive fading Western brands in the world’s largest car market, or whether it merely accelerates the transfer of expertise eastward.