China’s Rolls-Royce Rival May Have Found A Shortcut Into Europe

• Hongqi may build EVs in Spain at a Stellantis plant, fast-tracking its European expansion.
• Its heritage could be a selling point—or a liability—in Europe.
• Chinese automakers are increasingly using EU factories to avoid tariffs and scale faster.

For years, European automakers were worried that it was only a matter of time before Chinese brands would flood the continent with cheap EVs built in enormous factories back home. But the plot thickened when some of those Chinese brands were not content with merely selling cars in Europe. They want to build them there, too. The latest challenger is Hongqi, the Chinese luxury brand operated by FAW.

Unlike some other Chinese automakers that want their own plants to build cars in Europe, Hongqi takes a different approach. Reuters says it is currently in talks with Stellantis to build vehicles at one of the group’s Spanish plants as part of a wider European expansion plan. The talks are reportedly being handled through Leapmotor, the Chinese EV maker in which both FAW and Stellantis are investors.

Hongqi isn’t just another Chinese car brand. Its name translates to ‘red flag’ or ‘red banner’ and has long been associated with state limousines for officials of the Chinese Communist Party. It was founded in 1958, and Chairman Mao Zedong considered it China’s national car brand, so it has quite different baggage compared to much newer Chinese car brands like BYD or Nio. It’s a bit more political and a bit more storied than all the others.

Whether its past will put Europeans off buying Hongqi-branded cars remains to be seen, but the brand has big ambitions for the continent, and the cars seem pretty good. The company wants to launch 15 electric and hybrid models in Europe by 2028, and it hopes to exceed 1 million annual sales by 2030, with at least 10% coming from outside China.

Reuters notes that Hongqi wants to build all the cars it sells in Europe locally, and at least some of them could come out of the Stellantis factory in Zaragoza, Spain. That’s where Stellantis is reportedly going to build its electric SUV, jointly developed with Leapmotor. That brand is already using Stellantis facilities to assemble cars like the T03 in Europe and circumvent the import tariffs imposed by the European Union on China.

Hongqi could also use a Leapmotor platform for its European vehicles after the two struck a platform supply deal last year. Reuters quotes an unnamed insider with information on the matter, who said: “This was the way that Hongqi can start European production quickly. Hongqi is using that network to gain a manufacturing base through Leapmotor and Stellantis.”