Ottawa Says No: Joly Rejects Stellantis-Leapmotor Plan for Brampton

Joly Shuts the Door on Leapmotor Kits

Federal Industry Minister Mélanie Joly has officially rejected Stellantis' proposal to assemble Leapmotor electric vehicles from pre-fabricated Chinese kits at the Brampton, Ontario plant. Her statement was unequivocal: "We can't bring cars in a kit to Canada."

This rejection marks a turning point in the Stellantis-Brampton saga. Since the negotiations between Stellantis and its Chinese partner Leapmotor were revealed on April 1, political pressure has been mounting non-stop. Ontario Premier Doug Ford called the project "unacceptable" the very next day. Unifor, the union representing 3,000 laid-off workers, demands Stellantis honor its original commitments.

Ottawa's Three Non-Negotiable Conditions

Joly set three conditions for any production project at Brampton:

1. 1Worker protection — Compliance with Canadian labor standards and Unifor's collective agreement
2. 2Local supply chain — The project must support Canadian auto parts suppliers, not simply assemble imported Chinese components
3. 3CUSMA compliance — Software and technical standards must meet North American trade agreement rules

These conditions effectively rule out the "knock-down kit" model proposed by Stellantis. A knock-down kit is essentially a vehicle manufactured in China, partially disassembled for shipping, then reassembled here with minimal local labor.

$529 Million at Stake

Ottawa's real leverage is money. In 2022, the federal government granted up to $529 million in subsidies to Stellantis to guarantee the Brampton plant would remain open until 2035 with at least 4,475 Canadian employees. When Stellantis moved Jeep Compass production to Illinois in 2025, Ottawa issued a default notice and began fund recovery proceedings.

If Stellantis doesn't propose a production plan that meets Ottawa's conditions, the federal government has confirmed it will recover taxpayer money. It's a strong signal: Canada wants real automotive manufacturing, not IKEA-style car assembly.

Industry Expert: Flavio Volpe Sounds the Alarm

Flavio Volpe, president of the Automotive Parts Manufacturers' Association (APMA), was scathing in his criticism of the knock-down model. According to him, "these vehicles are completely manufactured in China with Chinese components, then partially disassembled and brought here to be reassembled."

Volpe raises a crucial point: a full manufacturing plant generates 10,000 to 12,000 jobs and $3 billion in annual parts purchases. Kit assembly? A few hundred workers, with no benefits for the local supply chain.

He recommends the federal government clarify that knock-down kits must count as imports under the 49,000 Chinese EV quota. If this rule is adopted, every Leapmotor assembled in Brampton would reduce the number of BYD, Chery, or Geely vehicles allowed into Canada.

What Options Does Stellantis Have Left?

Stellantis now has three possible scenarios:

Scenario 1: Full manufacturing with Leapmotor — Stellantis invests in a real local production line with Canadian suppliers. Expensive, but compliant with Ottawa's requirements. Unlikely in the short term.

Scenario 2: Return to a traditional Stellantis model — Produce another Stellantis vehicle (not Leapmotor) at Brampton. Possible, but Stellantis lacks EV models ready for Canadian production.

Scenario 3: Negotiate and repay — Stellantis agrees to repay part of the subsidies and permanently closes Brampton. It's the scenario nobody wants, but it's becoming increasingly likely.

For Chinese EV enthusiasts in Canada, this is a file to watch closely. If knock-down kits are blocked, it limits a potential entry route for Chinese vehicles in Canada. On the other hand, it protects the import quota for manufacturers like BYD and Chery who want to sell directly.

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