China’s Leapmotor looks to sell EV tech as it targets export growth

MUNICH (Reuters) – China’s Leapmotor needs to increase its sales by five times or more to survive a consolidating EV industry and is seeking partners outside China to license its technology, the company’s chief executive told Reuters.

The eight-year-old EV maker will target exports starting with Europe, Australia and New Zealand and five new models it is developing on a new platform, CEO Zhu Jiangming said in an interview at the Munich auto show on Monday evening.

Leapmotor used the show to unveil a new SUV, the C10, the first vehicle to be built for global markets and on technology it is offering to other carmakers to license.

“For us, to survive, we have to achieve at least 500,000 to 1 million units of annual sales globally. It would take at least two to three years for us to achieve that,” Zhu said.

He added, “The auto industry has to be consolidated. The top 10 automakers in the world all have annual sales of more than 4 million units. It is hard to achieve such a scale in China alone. Therefore, globalization is a must.”

Leapmotor had sales of almost 111,000 EVs in China in 2022, up from just over 44,000 in 2021. The top-selling auto brands in China – Volkswagen (ETR:), BYD (SZ:) and Toyota – had sales close to 2 million vehicles in the market in 2022.

While the company pushes its new EV, it is also looking to kickstart discussions with established automakers outside China to license its EV platforms, battery and motor technology or EV-ready chassis assemblies.

He declined to provide details on the companies Leapmotor has approached.

With European automakers scrambling to take a larger share of an EV boom in China that has largely left them behind, several have been looking at or licensing EV technology developed in China.

Germany’s Audi is in talks with SAIC Motor Corp (600104.SS) to buy an electric vehicle platform from the Chinese state-owned automaker. VW has said it will use a platform developed by Xpeng (NYSE:) for new EVs.

Zhu said other European automakers could follow.

“What they lack the most is the software development capabilities and it is perhaps the quickest way for them to seek technology partnerships to shore up the weakness,” Zhu said.

Zhu said it would only make sense for a Chinese automaker to set up a factory in Europe if it had annual sales of near 500,000 vehicles.