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Leapmotor, celebrating its 10th anniversary, announced that the state-owned automotive giant FAW Group has invested approximately CNY 3.7 billion (around USD 528 million) into the young electric vehicle company. The investment aims to significantly ramp up the startup’s annual sales, projecting an increase of more than six times over the next ten years.
On December 28, Leapmotor entered into a domestic share subscription agreement with FAW Equity Investment Tianjin, according to a filing made to the Hong Kong stock exchange yesterday. The company will issue nearly 75 million new shares at a price of CNY 50.03 (roughly USD 6.90) per share, equivalent to HKD 55.29 (about USD 7.08), to the subsidiary of FAW.
Once the deal is finalized, FAW Equity Investment will hold around 5 percent of Leapmotor’s shares, becoming one of its major shareholders. The ownership stake held by founder Zhu Jiangming and his affiliated parties will decrease slightly from 23.8 percent to 22.6 percent. Meanwhile, Stellantis, the European automaker and Leapmotor’s second-largest shareholder, will see its stake reduced marginally from 20 percent to 19 percent.
During a media briefing, Leapmotor’s Vice President Li Tengfei emphasized that agreements regarding shareholder ratios clearly safeguard the founding team’s controlling position, both in this new deal and previous arrangements with Stellantis. Zhu Jiangming highlighted the importance of having industry-leading shareholders like Stellantis and FAW, which are poised to support the firm’s stable growth. The collaboration with these established partners in strategic planning, product development, and component sourcing is expected to bolster Leapmotor’s resilience against market fluctuations.
Li also noted that FAW will help elevate the brand’s visibility and foster greater consumer trust in its vehicles. The company plans to purchase critical components from Leapmotor, which will benefit from FAW’s core engine technology—further solidifying its R&D capabilities.
The March agreement between the companies outlined intentions to explore deeper capital cooperation, create synergies across the supply chain, and jointly develop new energy passenger vehicles, including component partnerships.
Zhu also expressed ambitions for Leapmotor to become a global leader in electric vehicles, aiming for annual sales exceeding 4 million units within the next decade. In the first 11 months ending November 30, the company’s deliveries surged 114 percent year-over-year, totaling 536,100 units, with full-year sales expected to surpass 600,000 units. In 2022, sales more than doubled from the previous year to reach 293,700 units.
Distinct among Chinese EV startups, Leapmotor boasts strong research and development capabilities, especially in critical NEV components. The company’s vehicles feature a high proportion of self-developed parts and systems, establishing it as both a complete automaker and a Tier 1 supplier of automotive components.
Earlier today, shares of this Hong Kong-listed company rose slightly, climbing 0.1 percent to HKD 50.45, after earlier experiencing an increase of 1.4 percent.
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