Breaking: FAW Officially Takes a Stake in Leapmotor, Investing RMB 3.74 Billion for a 5% Share

Total fundraising of approximately RMB 3.74 billion. FAW Equity subscribes for nearly 74.83 million shares in Leapmotor.

CheDongXi (Dec 29) — Leapmotor has just released an announcement on the Hong Kong Stock Exchange, confirming that it has entered into a domestic shares subscription agreement with FAW Equity. Under the agreement, Leapmotor will issue approximately 74.83 million domestic shares to FAW Equity at a subscription price of RMB 50.03 per share.

Leapmotor stated that the subscription is expected to raise total gross proceeds of RMB 3.744 billion. The company also outlined how the funds will be used: around 50% (RMB 1.872 billion) will be allocated to R&D; roughly 25% (RMB 936 million) will be used to supplement working capital and for general corporate purposes; and the remaining 25% (RMB 936 million) will be directed toward expanding the sales and service network and strengthening brand awareness.

Regarding FAW’s entry as a shareholder, reports cite Leapmotor founder, chairman, and CEO Zhu Jiangming as responding publicly for the first time, emphasizing that Leapmotor will maintain the controlling rights of its actual controller—an arrangement he said will not change. With a major shareholder joining and providing support, alongside strategic and product-level collaboration, Zhu noted that the company’s overall stability is expected to improve.

Leapmotor Technology Vice President Li Tengfei added that whether it is the partnership with Stellantis or the cooperation with FAW, the investment agreements clearly define the equity ratio to ensure the management team retains control.

After the subscription is completed, FAW Equity will hold approximately 5% of Leapmotor’s shares.

As of Dec 24, 2025, Leapmotor’s Hong Kong-listed shares closed at HKD 49.94 (approximately RMB 45.02). At the time of writing, the share price was HKD 51.90 (approximately RMB 46.79).

At Leapmotor’s 10th anniversary brand event, Zhu Jiangming said the company aims to shed the “new carmaker” label. Over the next decade, Leapmotor plans to focus on elevating its brand positioning while targeting annual sales of 4 million vehicles.

FAW’s investment, in this context, provides Leapmotor with meaningful strategic resources and a strong vote of confidence for both its near-term execution and long-term development.

01. FAW and Leapmotor announce deeper collaboration and shared strategic resources

Earlier today, both Leapmotor and China FAW officially announced that they held a signing ceremony in Hangzhou to strengthen strategic alignment, share complementary resources, and deepen cooperation.

China FAW’s wholly owned subsidiary FAW Equity Investment (Tianjin) Co., Ltd. (“FAW Equity”) and FAW Qixin Power (Changchun) Technology Co., Ltd. (“Qixin Power”) signed an investment agreement and a cooperation agreement with Leapmotor, respectively.

The signing ceremony was attended by Yao Gaoyuan, Deputy Secretary of the Hangzhou Municipal Party Committee and Mayor of Hangzhou; Liu Yigong, Deputy Secretary of the Party Committee and General Manager of China FAW; and Zhu Jiangming, Founder, Chairman, and CEO of Leapmotor, who jointly witnessed the signing.

In a joint statement, the two sides emphasized that this partnership is rooted in long-term strategic trust and technological complementarity.

Going forward, the companies plan to use this cooperation as a new starting point—leveraging their respective strengths to deepen collaboration across areas such as joint R&D for intelligent connected new energy vehicles, coordinated manufacturing, and global expansion. The goal is to accelerate a new model for automotive industry partnerships, support high-quality development of China’s auto industry, and help advance China’s transformation from a “large auto market” into an “automotive powerhouse.”

02. Overseas cooperation model already landed; mass production expected in the second half of next year

As competition in electrification and intelligent vehicle technologies continues to intensify, China FAW and Leapmotor previously signed a Strategic Cooperation Memorandum of Understanding on March 3, 2025. The aim was to strengthen technology integration, consolidate resources, enhance product competitiveness, and better navigate market competition and challenges through mutual enablement.

To further deepen strategic coordination, the two sides are expanding cooperation in areas including capital and powertrain systems.

Under the agreements, FAW Equity will become a strategic shareholder of Leapmotor through a domestic-share private placement, promoting strategic synergy between the two automotive groups via capital integration. Meanwhile, Qixin Power will work with Leapmotor to share resources and jointly advance development and production collaboration in powertrain solutions such as plug-in hybrid and range-extender systems.

In late November, during Leapmotor’s 2025 third-quarter earnings call, Vice President Li Tengfei provided an update on the progress of the FAW–Leapmotor joint project.

Li said the first overseas model project has already been established, with mass production and overseas rollout scheduled for the second half of next year. He also noted that other cooperation initiatives are progressing steadily.

Li further emphasized that Leapmotor and FAW will build on their respective advantages to complement each other. Whether in China or overseas, Leapmotor can still learn from traditional automakers like FAW—especially in areas such as quality management and supply chain operations—where both sides see ample room for deeper collaboration.

03. Conclusion: FAW’s investment brings bigger opportunities—and bigger tests

Overall, FAW’s investment provides Leapmotor with valuable strategic resources and additional operational buffer at a pivotal stage—right as the company evolves from a “new force” into a more mature new energy automaker.

That said, this is not a guarantee of success.

Intense competition in a saturated market, highly ambitious sales targets, the intrinsic difficulty of brand elevation, and the real integration costs that often come with cross-company partnerships are all challenges that remain.

More than anything, this cooperation looks like a major strategic boost—giving Leapmotor more “ammunition” for the tough race ahead. Ultimately, whether it can win will still depend on its own comprehensive competitiveness across products, technology, operations, and brand building.