(Yicai) March 4 -- Chinese electric vehicle startup Leapmotor Technology and FAW Group have inked a deal to jointly develop passenger electric vehicles, with the former also becoming the designated supplier of relevant components for the state-owned auto giant.

Leapmotor and FAW plan to explore the possibility of achieving resource coordination across the entire supply chain through capital cooperation, the Hangzhou-based EV maker announced at a signing ceremony yesterday, without disclosing further details.

The deal marks Leapmotor's third in becoming the designated parts supplier for a traditional carmaker after reaching similar agreements with Stellantis, which holds a 20 percent stake in the company, and Great Wall Motor.

Leapmotor is expected to provide FAW with the technical architecture and related components for EVs, industry insiders told Yicai. Via resource coordination between the pair, the startup likely aims to grow its manufacturing capabilities and supply chain system and achieve returns on technology investments, they added.

Leapmotor has a relatively strong development capability for key EV parts compared with other Chinese startups. Its self-developed components and systems account for a relatively high ratio of the overall vehicle cost, making it a complete vehicle and a Tier 1 parts supplier.

In 2023, Stellantis invested around EUR1.5 billion (USD1.6 billion) to buy 20 percent of Leapmotor. The two then set up a 49/51 joint venture, which has the exclusive rights to make and sell Leapmotor cars worldwide except in China.

Leapmotor has received orders for components for a project by Stellantis, co-President Wu Qiang previously told Yicai.

Leapmotor sold 25,300 vehicles last year, ranking behind Li Auto and XPeng Motors among Chinese EV startups. The three ranked eighth, seventh, and sixth, respectively, among all domestic carmakers.

Editors: Tang Shihua, Martin Kadiev