FAW Group plans 10% stake in Leapmotor

Chinese state-owned automaker FAW Group is close to acquiring a 10% stake in battery electric vehicle (BEV) manufacturer Leapmotor, according to local reports citing people familiar with the deal.

The partnership would see the two companies jointly develop a new generation of smart electric vehicles, sharing research and development costs while building supply chain synergies to strengthen their competitiveness in China’s fast-growing new energy vehicle market.

FAW Group, China’s oldest carmaker, and Leapmotor signed a preliminary collaboration agreement earlier this year to explore opportunities for developing new electric vehicle models as competition intensifies from a growing number of local automakers and brands.

The deal would give FAW access to Leapmotor’s electric vehicle technology and manufacturing capabilities. Leapmotor is already 21% owned by European automaker Stellantis Group, which also holds a 51% stake in Leapmotor International, the joint venture responsible for the brand’s overseas sales.

Leapmotor sold 294,000 vehicles in 2024, more than double its 2023 volumes, while FAW Group delivered almost 3.2 million vehicles globally last year through its operations including foreign joint ventures with Volkswagen and Toyota.

The Chinese EV manufacturer’s models are sold in New Zealand by Auto Distributors NZ, which also distributes Peugeot, Citroën and Smart brands locally.

Both FAW and Leapmotor have declined to comment on the reports, which suggest the companies are currently discussing final details of an agreement.

The potential partnership reflects the rapidly evolving landscape in China’s electric vehicle sector, where traditional state-owned manufacturers are seeking to strengthen their position against newer electric-focused competitors and international brands entering the market.

FAW Group’s interest in Leapmotor comes as the company looks to accelerate its transition to electric vehicles and compete more effectively in the premium EV segment where Leapmotor has established a growing presence.