Chinese startup Leapmotor has gained a new major investor: the state-owned China FAW Group, via its subsidiary FAW Equity Investment, has taken a stake in the company. For the market, this is a fairly rare case where a state-backed auto giant not only cooperates with an NEV startup, but buys an equity stake directly.
The deal was completed on December 28: Leapmotor will issue 74,832,245 domestic shares to FAW Equity at 50.03 yuan per share (equivalent to 55.29 Hong Kong dollars). As a result, the company raised 3.74 billion yuan, or about $530 million. Half of this money will go to research and development, another 25% will be used for working capital and general corporate purposes, and the remaining 25% will be allocated to expanding sales and service, alongside boosting brand awareness.
Following the placement, FAW Equity received 5% of Leapmotor. Stellantis, which invested in the company in 2023, currently holds 18.99% of the shares. On the news, Leapmotor shares in Hong Kong rose by about 6% at the start of trading and reached 52.95 HKD, while the market capitalization was estimated at 75.28 billion HKD.
Leapmotor separately emphasized that FAW is becoming a strategic shareholder, meaning the interaction between the groups will not be merely formal. An agreement has already been signed with FAW’s subsidiary FAW Qixin Power: the partners intend to jointly develop and produce PHEV hybrid powertrains, as well as range-extender units. Recall that back in March the companies agreed on joint development of passenger NEVs and cooperation on components.
The intrigue for the market is the first joint model. According to media reports, a project tied to the FAW Hongqi brand is already in development, and FAW plans to leverage its overseas channels in the second half of next year. Leapmotor itself said at its 10th anniversary celebration that the debut of the first car created together with FAW will take place as early as next year. Company head Zhu Jiangming believes this vehicle will mark the start of a new cooperation model between a state-owned company and private business.
Leapmotor was founded in 2015 and in recent years has become one of China’s fastest-growing NEV startups. In November, the company delivered a record 70,327 vehicles, and from January to November it sold 536,132 cars, effectively reaching its previous 2025 sales target. Next, the plans are even more ambitious: 1 million vehicles a year by 2026 and 4 million in the following decade, aiming for the status of a global electric-vehicle manufacturer (source: cnevpost.com).
