FAW Group is in the process of acquiring a stake in Leapmotor (HKG: 9863) to become a strategic shareholder, local media outlet Cailian reported today.
FAW plans to make an initial offer to acquire about 10 percent of Leapmotor's shares, and the plan is currently being advanced internally, the report said, citing a source familiar with the matter.
Leapmotor and FAW signed a strategic cooperation memorandum of understanding on March 3 at the latter's headquarters in Changchun, Jilin province, to jointly develop passenger new energy vehicles (NEVs) and cooperate on parts.
The first jointly developed vehicle project between the two companies has already commenced, and work is progressing actively, Leapmotor said in its semi-annual financial report.
The two parties will further explore the feasibility of deepening capital cooperation to achieve full-industry-chain resource synergy, Leapmotor said in the report.
More new vehicle cooperation projects between FAW and Leapmotor are also under discussion, the source told Cailian.
The first model developed by Leapmotor and FAW's Hongqi brand is currently in the development stage and is planned to be launched in the second half of next year using FAW's overseas channels, according to the report.
Leapmotor is one of the fastest-growing new carmakers in China, delivering 221,664 vehicles in the first half of this year, a year-on-year increase of 155.68 percent.
The company achieved net income of RMB 30 million ($4.2 million) in the first half of 2025, marking its first positive net income in a half-year period.
On July 24, another local media outlet, Jiemian, reported that FAW would collaborate with Leapmotor to develop new electric vehicle (EV) models based on Leapmotor's B platform for sale in overseas markets.
This is similar to the cooperation model between Leapmotor and Stellantis, Jiemian noted in its report.
Stellantis invested 1.5 billion euros in Leapmotor in 2023 to acquire about 20 percent of its shares, becoming the largest external shareholder of the Chinese EV maker.
In the past two years, Leapmotor has entered 30 international markets through Stellantis' sales network and exported more than 20,000 vehicles in the first half of this year.
FAW had hoped to invest in a Chinese NEV manufacturer and even considered acquiring the company, but ultimately failed to reach an agreement, Jiemian said in July, citing an unnamed source from the automaker.
In addition to its cooperation with FAW, Leapmotor will also cooperate with FAW and Volkswagen's joint venture FAW-Volkswagen, according to Jiemian.
Leapmotor's cooperation with FAW-Volkswagen may be similar to that between Xpeng (NYSE: XPEV) and Volkswagen, with FAW-Volkswagen developing and selling new models in the domestic market based on Leapmotor's technical architecture, the report said.
