Stellantis (NYSE: STLA) and China's Dongfeng Group signed a non-binding memorandum of understanding to establish a Europe-based joint venture for sales, distribution, manufacturing, purchasing and engineering of Dongfeng's electric vehicles.

The proposed joint venture would be led by Stellantis with a 51% stake, while Dongfeng would hold 49%. The new entity would handle sales and distribution of Dongfeng's Voyah-branded premium electric vehicles in designated European markets, utilizing Stellantis' existing network and after-sales capabilities.

The partners plan to produce Dongfeng electric vehicles at Stellantis' Rennes plant in France to comply with European regulations and Made-in-Europe requirements. The joint venture would also conduct purchasing and engineering activities, accessing Dongfeng's Chinese electric vehicle ecosystem.

"The plans we are announcing today take our recently strengthened cooperation with Dongfeng to an all-new dimension of an international partnership to the benefit of customers around the world," said Antonio Filosa, Stellantis CEO.

Dongfeng Chairman Qing Yang stated the partnership aligns with China's strategies of opening up and stabilizing foreign investment while supporting both companies' global expansion plans.

Earlier this month, the companies announced strengthening their China-based Dongfeng Peugeot Citroën Automobile joint venture, which will produce new Peugeot and Jeep electric vehicles at its Wuhan plant starting in 2027 for domestic and export markets.

The 34-year partnership between Stellantis and Dongfeng has produced over 6.5 million Peugeot and Citroën vehicles in China. Implementation of the new European joint venture remains subject to execution of implementation agreements and regulatory approvals.