Carmakers look for collaboration over competition

China's oldest carmaker FAW has partnered with 10-year-old Leapmotor, marking another significant milestone in the evolving relationship between traditional automotive giants and emerging NEV startups.

The partnership focuses on two key areas: joint development of NEV technologies and exploration of capital cooperation, according to their memo signed last week.

FAW, established in 1953, is often referred to as the "eldest son of China's auto industry". It brings decades of manufacturing expertise and a vast supply chain network.

Leapmotor contributes its cutting-edge technologies, including its self-developed "Clover" central integrated electronic architecture and cell-to-chassis battery integration system.

This collaboration aims to enhance product competitiveness and accelerate FAW's transition to electrification, which has lagged behind industry peers.

The new partnership signals a new era where legacy automakers and tech-driven startups are joining forces to navigate the electric and intelligent vehicle revolution, said analysts.

The partnership with FAW came after Leapmotor's collaboration with Stellantis, a global automotive giant.

In 2023, Stellantis invested 1.5 billion euros ($1.62 billion) to acquire a 20 percent stake in Leapmotor. The two sides have also formed a joint venture named Leapmotor International.

This venture, with Stellantis holding a 51 percent stake, focuses on exporting and manufacturing Leapmotor vehicles outside China.

The partnership has already borne fruit, with production of Leapmotor vehicles at a Stellantis plant in Poland.

This move not only reduces production costs but also helps Leapmotor bypass EU tariffs on Chinese EVs, making its products more competitive in Europe.

Volkswagen was the first global carmaker to partner with a Chinese startup. The German car group acquired a 4.99 percent stake in Xpeng in 2023 and the two have been collaborating on developing EVs based on Xpeng's platform.

The first model, which will bear a Volkswagen logo, is expected to hit the market in 2026 and it will only be available in the Chinese market.

This partnership has allowed Volkswagen to leverage Xpeng's advanced intelligent driving and cockpit technologies, while Xpeng benefits from Volkswagen's purchasing and manufacturing expertise.

The two companies are now expanding their cooperation to build China's largest ultra-fast charging network, with over 20,000 charging terminals across 420 cities.

This is a striking contrast to previous years when international automakers sought to dominate China's market, where local Chinese brands were underdogs.

With such technology as electrification and smart driving, China has now become a hub of EV innovation, with homegrown brands leading in software-defined vehicles and battery technology.

Oliver Blume, chairman of the board of management at Volkswagen Group, has called China a "fitness center" for global brands.

Its premium brand Audi has been working with SAIC to launch an electric-car only brand. The models are being built on a China-specific platform named "Advanced Digitized Platform".

Zhu Huarong, chairman of Changan Automobile, said the automaker started to contribute its technology to its global partners five years ago. The State-owned carmaker has joint ventures with Ford and Mazda.

Such examples reflect a growing realization among global players that cooperation, rather than confrontation, is the way forward, said analysts.

The global auto sector is no longer a zero-sum game where traditional and new players, or Chinese and foreign brands, must battle for dominance. Instead, the path to success increasingly lies in pooling expertise, they said.

lifusheng@chinadaily.com.cn