Chinese electric vehicle manufacturer Zhejiang Leapmotor Technology Co., which officially launched in South Africa earlier this year, has secured a major investment deal worth 3.74 billion yuan (about R8.9 billion) with Chinese state-owned automaker FAW Group.
Leapmotor confirmed in a regulatory filing on Monday that FAW Group will acquire a 5% stake in the company. The transaction is still subject to approval by China’s securities regulator, a process that could take several months to conclude.
Industry Consolidation Accelerates
The deal is widely seen as a sign that consolidation in China’s crowded electric vehicle market is accelerating. The country currently has more than 100 EV brands, offering hundreds of models, even as demand growth begins to slow.
This oversupply has fuelled a prolonged price war, squeezing margins across the automotive supply chain. Chinese authorities have increasingly encouraged state-owned manufacturers, including FAW Group, to invest in or consolidate with private EV makers to improve competitiveness and long-term sustainability.
Leapmotor’s Global and South African Expansion
Leapmotor is among a small group of Chinese EV manufacturers that have begun turning a profit, helped by strong demand for its affordable, family-oriented SUVs.
The company has also expanded globally through a joint venture with Stellantis, which oversees international distribution — including the brand’s entry into South Africa in 2025. The local launch positioned Leapmotor as a new contender in the growing South African EV market, where demand for electric and hybrid vehicles is steadily rising amid fuel price pressure and climate concerns.
Strong Sales Growth
Leapmotor reported that vehicle sales in the first 11 months of this year doubled compared to the same period last year. This surge allowed the company to exceed its annual sales target of 500,000 vehicles ahead of schedule.
Founder and CEO Zhu Jiangming said the company is aiming to sell 1 million vehicles next year, with a longer-term ambition of reaching 4 million annual sales within the next decade.
Strategic Signal for the EV Market
The FAW investment is being interpreted as both a vote of confidence in Leapmotor’s business model and a strategic move by the Chinese state to stabilise the EV sector.
For South Africa, Leapmotor’s rapid growth and strong backing could mean greater product availability, competitive pricing, and long-term commitment to the local market as EV adoption continues to gain momentum.
