China’s state-owned FAW Group is preparing to acquire a stake in electric vehicle maker Leapmotor, local outlet Cailian reported on Tuesday, in a move that could further solidify their partnership in new energy vehicle (NEV) development.
FAW is advancing an internal plan to acquire around 10 percent of Leapmotor’s shares, the report said, citing a person familiar with the matter. The potential investment follows a memorandum of understanding signed in March, under which both companies agreed to jointly develop passenger NEVs and collaborate on auto parts.
According to Leapmotor’s latest financial report, the first co-developed vehicle project between the two companies is already underway, with progress described as active. More joint projects are also being discussed. One of the earliest models, developed in partnership with FAW’s premium Hongqi brand, is scheduled for launch in the second half of 2026 and will be distributed through FAW’s overseas sales channels.
Leapmotor has rapidly emerged as one of China’s fastest-growing EV startups, delivering 221,664 vehicles in the first half of 2025 — a year-on-year increase of 155.7 percent. The company also reported its first half-year profit, recording a net income of RMB 30 million ($4.2 million).
The collaboration could extend into deeper capital ties, with both sides weighing options for broader industry-chain resource sharing. In July, Chinese media outlet Jiemian reported that FAW and Leapmotor planned to jointly develop EVs based on Leapmotor’s B platform, targeting international markets.
This approach mirrors Leapmotor’s partnership with Stellantis, which invested €1.5 billion in 2023 to acquire about 20 percent of the Chinese automaker. Leveraging Stellantis’ distribution network, Leapmotor has since entered 30 global markets and exported more than 20,000 vehicles in the first half of this year.
Beyond the strategic partnership, Leapmotor is also expected to collaborate with FAW-Volkswagen, potentially following a model similar to Volkswagen’s existing tie-up with Xpeng, where vehicles are co-developed using startup technology but sold under established joint ventures.
