(Yicai Global) July 4 -- Shares in Zhejiang Founder Motor soared by the exchange-imposed limit today after the Chinese supplier of electric motors to new energy vehicle makers said that it is linking arms with electric car startup Xpeng to mass produce NEV motors.

Founder Motor’s share price [SHE:002196] surged 10 percent to CNY7.57 (USD1.05). The stock has gained 4.3 percent in value in the past year.

Founder Motor and Xpeng will join forces to manufacture and promote the motors used in electric cars, the Lishui, eastern Zhejiang province-based company said yesterday. The motor, along with the battery and electronic control system, is a core component that determines the main performance indices of NEVs.

The tie-up with Guangzhou-based Xpeng will expand the application scenarios of its motors for electric cars and boost business, Founder Motor said.

Founder Motor, which started out as a sewing machine motor maker in 1991 before branching into the auto sector, logged a 37 percent jump in net profit in the first quarter from a year ago to CNY8.2 million (USD1.1 million), according to its latest earnings report. But revenue sank 22 percent to CNY445 million (USD61.5 million).

China’s electric vehicle market is showing signs of recovery after a slow start to the year. Xpeng reported a 15 percent increase in sales in June from May to 8,620 units, but this is still a 26 percent drop from a year ago and far behind its main competitors Li Auto and Nio, which sold 32,575 and 10,707 units in June respectively.

Editor: Kim Taylor