FAW Group plans to acquire a stake in local battery electric vehicle (BEV) manufacturer Zhejiang Leapmotor Technology Company, as the Chinese state-owned automaker looks to strengthen its presence in the country’s fast-growing new energy vehicle (NEV) market, according to local reports citing people close to the deal.
China’s oldest carmaker is understood to be close to acquiring a 10% stake in Leapmotor, which would pave the way for the two companies to jointly develop a new generation of smart NEVs, with shared R&D costs and increased economies of scale by developing supply chain synergies. The partnership would help strengthen their competitiveness in the BEV segment.
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Earlier this year, the two companies signed a preliminary agreement to explore opportunities for collaboration in the development of new NEV models, as they face rising competition from a growing number of local automakers and brands.
Leapmotor, which is 21%-owned by European automaker Stellantis Group, sold 294,000 vehicles in 2024, more than double its 2023 volumes. Stellantis also owns a 51% stake in Leapmotor International, the joint venture responsible for Leapmotor’s overseas sales. FAW Group sold almost 3.2 million vehicles globally last year, including its foreign joint ventures with Volkswagen and Toyota.
Both FAW and Leapmotor have so far declined to comment on the reports, which suggest that the two companies are currently discussing the final details of an agreement.
