Italian prime minister Giorgia Meloni is eyeing a huge deal with Chinese car manufacturer Chery Automobiles.
It comes after Meloni became embroiled in a spat with Italian car firm Stellantis saying a car marketed as an “Italian jewel” must be made in the country amid fears too much manufacturing is moving abroad.
As a result, her government has been holding talks with Chery, which is owned by the Chinese state and is the country’s third-largest car maker.
Other Chinese companies BYD and Great Wall Motor have also been approached by the Italian government to open a new European factory, but it is believed Chery is leading the race.
The Chinese company focuses on electric vehicles (EVs) and is thought to be opening a UK plant during the next decade.
Meloni wants Chery to help Italy increase annual vehicle production from 800,000 vehicles per year to 1.3 million and the Italian government also wants Agnelli-owned Stellantis, the only car company left in Italy, to pitch in by increasing production to one million vehicles per year from 750,000.
Stellantis has been criticised by Meloni for ditching its Italian roots and listing shares in New York.
If Chery is lured to Italy it is thought the company would help build another 300,000 cars, helping the government hit the 1.3 million target.
Adolfo Urso, Italy’s industry minister, has previously held talks with Tesla and three Chinese car makers about setting up a new plant.
The government’s bid to bring Chinese firms to Italy could prompt fury from both the EU and the US, who have expressed concerns about their rise.
The EU is investigating subsidies paid to Chinese EV makers and whether they flout the union’s subsidy rules, while the US wants to cut Chinese EV batteries and supplies from the US automotive sector through the Inflation Reduction Act.
A joint venture between Stellantis, Mercedes-Benz and TotalEnergies is aiming to build new EV ‘gigafactories’ across Europe over the next few years.
Negotiations for Italian subsidies over the plan have been ongoing, which is another factor in the Meloni-Stellantis dispute.
