Chinese electric vehicle maker Leapmotor said it has secured a strategic investment from China FAW Group, marking a rare case of a major state-owned automaker taking an equity stake in a privately held new energy vehicle (NEV) company.
In a filing to the Hong Kong stock exchange on Monday, Leapmotor said it had signed a share subscription agreement with FAW Equity Investment, a wholly owned subsidiary of FAW Group. Under the deal, Leapmotor will issue 74.83 million new domestic shares at 50.03 yuan ($7.05) per share, raising approximately 3.74 billion yuan ($530 million).
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FAW Equity will acquire a 5% stake in Leapmotor through the transaction. Following the investment, Stellantis — which invested in Leapmotor in 2023 — remains the company’s largest external shareholder with a 18.99% stake.
Leapmotor said about half of the proceeds will be used for research and development, with the remainder allocated to working capital, general corporate purposes, and the expansion of sales and service networks to support brand growth.
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The automaker said FAW will become a strategic shareholder, deepening industrial cooperation between the two companies. In a separate statement, Leapmotor said it had also signed a cooperation agreement with FAW subsidiary Qixin Power to jointly develop and manufacture plug-in hybrid and extended-range powertrain systems.
The two companies previously agreed in March to collaborate on the development of passenger new energy vehicles and components. Leapmotor has said its first jointly developed model with FAW’s Hongqi brand is expected to debut next year, marking a new form of cooperation between a state-owned automaker and a private EV manufacturer.
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Leapmotor shares rose around 6% in Hong Kong trading following the announcement, giving the company a market capitalization of about HK$75.3 billion.
Founded in 2015, Leapmotor has emerged as one of China’s fastest-growing EV startups. The company delivered 70,327 vehicles in November, lifting cumulative deliveries for the first 11 months of the year to 536,132 units. It has set a target of reaching annual sales of one million vehicles by 2026 and four million units over the longer term.