Leapmotor FAW Investment Signals Deeper NEV Industry Alignment

On December 28, Leapmotor secured a significant capital infusion through a strategic transaction, marking a rare instance of a Chinese state-owned automaker backing a new energy vehicle startup. The Leapmotor FAW investment highlights growing institutional confidence in China’s rapidly evolving NEV ecosystem and underscores deeper collaboration across the domestic automotive value chain.
Strategic Share Subscription Strengthens Capital Base
Under a domestic share subscription agreement, Leapmotor issued 74,832,245 domestic shares to FAW Equity Investment, a wholly owned subsidiary of China FAW Group. The shares were priced at RMB 50.03 per share, equivalent to HKD 55.29, reinforcing the valuation benchmark set by the market.
This Leapmotor FAW investment generated total proceeds of RMB 3.74 billion, providing the company with long-term financial flexibility while reinforcing its shareholder structure through state-backed participation.
Targeted Use of Proceeds to Accelerate Growth
Leapmotor plans to deploy the raised capital across priority business areas aligned with its expansion roadmap:

• Around 50 percent allocated to research and development activities

• Approximately 25 percent directed toward working capital and general corporate needs

• The remaining 25 percent earmarked for expanding sales and service networks and strengthening brand presence

This capital deployment strategy supports product innovation while enhancing operational resilience in a competitive NEV market.
Shareholding Impact and Market Response
Following the transaction, FAW Equity holds a 5 percent equity stake in Leapmotor. Stellantis, which invested in the company in 2023, remains a major shareholder with an 18.99 percent stake, reflecting continued international interest alongside domestic institutional backing.
Market sentiment responded positively to the Leapmotor FAW investment, with Leapmotor shares rising around 6 percent in early Hong Kong trading, reaching HKD 52.95 and pushing market capitalization to approximately HKD 75.28 billion.
Strategic Cooperation Extends Beyond Equity
Beyond capital participation, FAW will become a strategic shareholder, enabling broader operational synergies between the two automotive groups. Leapmotor has also entered into a cooperation agreement with FAW subsidiary Qixin Power to jointly advance co-development and production synergies in plug-in hybrid and extended-range powertrain technologies.
This collaboration positions the Leapmotor FAW investment as both a financial and technological partnership, reinforcing Leapmotor’s role in China’s next phase of electrified mobility development.