Stellantis could add Peugeot EV production in Spain, defying France

Stellantis is leaning toward expanding production of its popular Peugeot e-208 full-electric small hatchback in Spain despite pressure from the French government to add output in France, according to people familiar with the situation.

French Finance Minister Bruno Le Maire wants Stellantis to make the compact model locally and has been discussing the matter with CEO Carlos Tavares, said the people, who asked not to be identified citing the private nature of the talks.

Stellantis currently builds the e-208 in Trnava, Slovakia, and is now mulling an expansion of its plant in Zaragoza, northeastern Spain, where it already makes small cars including the Opel Corsa, the people said. A final decision hasn’t been made.

Non-electric versions of the 208 are also built in Kenitra, Morocco, where Stellantis has recently invested hundreds of millions of euros to expand production.

Governments across Europe are fighting for automaking jobs as the shift to battery power upends the industry. Securing production of a mass-market vehicle like the 208 would be a coup because it’s now Europe’s best-selling car, having ended the 14-year reign of the Volkswagen Golf in 2022. 

Spain is among countries that have become more competitive for EV manufacturing investment because of favorable tax conditions and relatively low labor and energy costs.

The French government is working with Stellantis and its peers to locate assembly of as many vehicles as possible in France, a finance ministry official said, declining to elaborate. A spokesman for Stellantis declined to comment.

Stellantis has pledged to produce 12 EVs in France, but they are mostly larger, higher-end models like the e-308 compact sedan and e-408 midsize fastback sedan. After Renault said it will assemble its electric R5 compact car at home, Paris is hoping Stellantis will also build more budget vehicles in the country to help counter inflation, the people said. The e-208 starts at around 35,000 euros ($38,623) in France.

Stellantis earlier this month said it expects to hire 1,200 people in production, engineering and sales in France this year.