Quick Takeaways
- FAW deepens its strategic push into electrified powertrains through capital investment and technology collaboration with Leapmotor.
- The partnership channels funding into R&D, operations, and market expansion while accelerating hybrid and range-extended EV platforms.
On December 29, FAW Leapmotor investment marked a significant step in China’s electric vehicle ecosystem as FAW Equity Investment (Tianjin) Co., Ltd. and FAW Qixin Power (Changchun) Technology Co., Ltd., both wholly owned subsidiaries of FAW Group, entered into investment and cooperation agreements with Leapmotor in Hangzhou. The collaboration underscores a shared focus on accelerating new-energy vehicle technologies and industrial capabilities.
FAW Leapmotor investment details and capital deployment
Under the FAW Leapmotor investment agreement, FAW Equity will acquire an equity stake in Leapmotor through the issuance of additional domestic shares. This transaction is expected to raise approximately CNY 3.744 billion, providing Leapmotor with substantial capital to support its next phase of growth and technology advancement.
The funds raised through the FAW Leapmotor investment will be allocated across three priority areas aligned with long-term competitiveness and operational scale:
Powertrain collaboration to support electrified vehicle platforms
Beyond the equity transaction, FAW Qixin Power will deepen resource sharing with Leapmotor to advance collaborative development and manufacturing of powertrains. This cooperation will target vehicle models including plug-in hybrid electric vehicles and range-extended electric vehicles, reflecting growing demand for diversified electrification solutions.
By combining FAW’s industrial resources with Leapmotor’s innovation-driven approach, the FAW Leapmotor investment is positioned to strengthen powertrain localization, improve development efficiency, and support scalable production. The partnership highlights a broader trend within China’s automotive sector, where strategic investments are increasingly used to accelerate electrification and reinforce competitive positioning across the value chain.
FAW Leapmotor investment details and capital deployment
Under the FAW Leapmotor investment agreement, FAW Equity will acquire an equity stake in Leapmotor through the issuance of additional domestic shares. This transaction is expected to raise approximately CNY 3.744 billion, providing Leapmotor with substantial capital to support its next phase of growth and technology advancement.
The funds raised through the FAW Leapmotor investment will be allocated across three priority areas aligned with long-term competitiveness and operational scale:
- Research and development: CNY 1.872 billion, representing 50 percent of the total proceeds, will be directed toward strengthening R&D capabilities, with a focus on next-generation vehicle platforms and electrified technologies.
- Working capital and corporate purposes: CNY 936 million, or 25 percent, will be used to support daily operations and overall corporate requirements.
- Sales, service, and brand expansion: The remaining CNY 936 million, accounting for 25 percent, will be invested in expanding sales and service networks while enhancing brand visibility in key markets.
Powertrain collaboration to support electrified vehicle platforms
Beyond the equity transaction, FAW Qixin Power will deepen resource sharing with Leapmotor to advance collaborative development and manufacturing of powertrains. This cooperation will target vehicle models including plug-in hybrid electric vehicles and range-extended electric vehicles, reflecting growing demand for diversified electrification solutions.
By combining FAW’s industrial resources with Leapmotor’s innovation-driven approach, the FAW Leapmotor investment is positioned to strengthen powertrain localization, improve development efficiency, and support scalable production. The partnership highlights a broader trend within China’s automotive sector, where strategic investments are increasingly used to accelerate electrification and reinforce competitive positioning across the value chain.
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