Leapmotor has started supplying its self-developed battery packs to external customers, marking its expansion into component sales. While the battery cells are still sourced from suppliers such as Contemporary Amperex Technology (CATL), the packs themselves are designed and assembled in-house by Leapmotor. This new business is managed by Lingxiao Energy Technology, a subsidiary focused on battery R&D.
The unit has already secured orders from more than five new energy commercial vehicle manufacturers and is actively seeking new clients. Seazon Motor, which sells under the Xeazon brand, is reportedly in advanced discussions with Lingxiao.
Battery packs are among the most critical components of an electric vehicle. For Leapmotor, landing commercial orders signals progress in its component supply ambitions. For CATL, working with an intermediary like Leapmotor may offer a cost-effective path to expand in the commercial segment without having to build fully customized solutions for every client.
Breaking into the commercial vehicle segment
Vertical integration has been central to Leapmotor’s strategy, especially for core new energy vehicle (NEV) systems like batteries, electric drives, and electronic control units. Years ago, it began building these capabilities in-house, eventually spinning off subsidiaries such as Lingsheng Power Technology and Lingxiao.
In July, CEO Zhu Jiangming said Leapmotor would broaden its in-house R&D scope to include any high-value component the company could reasonably develop itself. The goal isn’t just to reduce costs, but to emulate BYD’s strategy of selling both vehicles and components.
Leapmotor’s joint venture with Stellantis is a key example. Last year, the company licensed its electronic architecture to Stellantis and began supplying parts such as electric drives and headlights via the venture. The move appeared designed to offset R&D costs while opening new revenue streams.
In March, Leapmotor also struck a deal with Hongqi to co-develop a new model for overseas markets, with production set to begin in the second half of next year.
Now, by supplying battery packs to commercial vehicle makers and expanding its sales team, Leapmotor appears to be scaling its component business. But breaking into passenger vehicle supply chains remains difficult for automakers developing their own parts.
The reason is twofold: the passenger EV supply chain is already mature, and few carmakers are willing to share future product plans with a direct competitor.
In contrast, the commercial EV segment presents fewer barriers and stronger growth potential.
According to data from the China Passenger Car Association (CPCA), China’s passenger vehicle retail sales reached 10.9 million units in the first half of 2025. NEVs accounted for 5.47 million of those, a 33.3% year-on-year (YoY) increase. That pushed NEV penetration above 50%, suggesting that passenger market growth may begin to slow.
The commercial NEV market, however, is still in its early stages. CPCA data shows that 2.12 million commercial vehicles were sold in the first half of 2025, including 402,000 NEVs, a 66.5% YoY jump. With NEV penetration in this segment still under 20%, growth potential remains substantial.
That growth is driving battery demand. In 2024, commercial vehicle battery installations reached 65.2 gigawatt-hours, up 116.4% from the previous year. In the first half of 2025 alone, installations hit 51.4 GWh, a 126.2% YoY increase.
Cost sensitivity is also more pronounced among commercial buyers. Here, Leapmotor’s OEM (original equipment manufacturer) background could give it an edge. Its system-level engineering allows it to pair CATL battery cells with its own packs, offering a more cost-effective alternative to CATL’s full-pack solutions.
Seeking new allies to protect market share
CATL, China’s leading battery supplier, has been working to expand into the commercial EV space for some time. Last year, it launched two products under the Tianxing-L series, aimed at tackling key concerns like charging time and driving range.
Tianxing-L’s fast charging variant was the industry’s first 4C battery for light commercial EVs. According to CATL, the pack offers a capacity of 140 kilowatt-hours with a system energy density of 155 watt-hours per kilogram, charging up to 60% in just 12 minutes.
The long range edition offers a 200 kWh capacity and 200 Wh/kg system energy density, with a fully loaded range of up to 500 kilometers of range when driving at 80 km per hour.
This year, CATL’s battery swapping subsidiary launched a standardized battery pack for heavy-duty trucks. At the product launch, CATL announced it had partnered with more than ten automakers—including FAW Jiefang, Shacman, and Dongfeng Motor—to develop over 30 chassis-swap EV models.
CATL clearly has the capability to sell full battery systems directly to commercial vehicle makers. Yet in some cases, it has opted to use Leapmotor’s packs instead.
This commercial partnership could signal the beginning of a deeper alliance, one that may eventually extend into the passenger vehicle segment.
Until recently, Leapmotor sourced batteries mainly from second- and third-tier suppliers such as China Aviation Lithium Battery (CALB), Zenergy, and Gotion High-tech. But CATL cells now power Leapmotor’s B01 series, including premium and LiDAR-equipped (light detection and ranging) versions offering up to 650 km of range.
For Leapmotor, long positioned as a value brand, CATL’s endorsement brings a lift in credibility. For CATL, Leapmotor represents a high-growth partner that could help defend market share in an increasingly competitive landscape.
That pressure is mounting. According to the China Automotive Battery Innovation Alliance (CABIA), CATL’s market share dropped more than three percentage points YoY in the first half of 2024, falling to 43.05%.
New entrants are turning to rivals. Xiaomi’s YU7 uses batteries from BYD’s FinDreams Battery, while Onvo’s L90 is supplied by CALB. To stem further losses, CATL must strengthen its ties with emerging NEV brands.
Leapmotor is among the fastest-growing players in the sector. The company delivered 221,700 vehicles in the first half of 2024, up 156% from the year prior. In July alone, deliveries topped 50,000 units, a 126% YoY increase.
Assuming batteries make up around 30% of vehicle production costs, Leapmotor’s Q1 battery spending likely exceeded RMB 2.5 billion (USD 350 million).
Xpeng Motors offers another case to watch. In 2022, company president Gu Hongdi signaled a shift away from reliance on CATL, announcing a diversified supply strategy. Yet the first two models Xpeng is co-developing with Volkswagen are reportedly set to use CATL batteries, suggesting the relationship isn’t over.
Following the July launch of the Leapmotor C11, CEO Zhu Jiangming expressed cautious optimism. “We only just won the war of resistance,” he said, referring to the company’s first profitable quarter in late 2023. “If we can’t ramp up sales quickly and boost both earnings and market share, things could get dangerous.”
Expanding its battery pack business may be exactly the kind of complementary strategy Leapmotor needs to grow profits and fortify its vehicle business.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Fan Shuqi for 36Kr.