China: FAW allegedly ready to invest in Leapmotor
FAW Group is nearing completion of an equity investment in Leapmotor, expected to be finalized later this year. FAW plans to acquire a 5% stake, less than initially anticipated. Leapmotor's strong sales and financial performance have influenced FAW's decision. Leapmotor's largest shareholder is Stellantis Group with 21.26%, while the founders hold 25.8%. FAW aims to enhance its electric vehicle sales through this investment, as its current NEV sales lag behind market averages.
Rumours about the state-owned automaker’s potential investment in the rapidly growing EV startup had already surfaced over the summer. Since spring 2025, the two companies have collaborated on their first joint vehicle project. The progress achieved, Leapmotor’s consistently strong sales figures, and its financial performance appear to have convinced FAW’s decision-makers to invest in the company.
Leapmotor’s founder, chairman, and CEO, Zhu Jiangming, has now confirmed the ongoing discussions, stating that the company will not relinquish actual control. According to the latest reports, FAW intends to acquire around 5 per cent of Leapmotor—half the stake previously assumed. Earlier in the summer, the Chinese media outlet Cailian Press had reported that Leapmotor was seeking a 10 per cent investment, though those plans were still in the early stages at the time.
Leapmotor’s largest single shareholder is the Stellantis Group, which acquired a multi-billion-euro stake in the company in 2023 and currently holds 21.26 per cent. Zhu Jiangming and other members of the founding team collectively hold approximately 25.8 per cent through ‘direct and indirect holdings,’ according to the portal Car News China. While the founders, together with Stellantis, do not hold a majority stake, they effectively retain control of the company.
It remains unclear how much FAW would need to invest for the five per cent stake in Leapmotor—even though the figure now appears to be lower than previously anticipated. Leapmotor does not currently seem to be under significant financial pressure. In the third quarter, the company reported revenue of 19.45 billion yuan (2.36 billion euros), representing an increase of over 97 per cent compared to the same quarter last year and a 36.7 per cent rise from Q2 2025. For the coming year, Leapmotor’s Vice President Li Tengfei has projected a net profit of five billion yuan (currently around 610 million euros).
On the other hand, pressure on the FAW Group is mounting to boost its comparatively weak electric vehicle sales. New Energy Vehicles (including battery-electric cars, plug-in hybrids, range-extender vehicles, and fuel cell models) currently account for only around ten percent of the group’s total sales, while the NEV share in the overall market stands at approximately 50 percent. FAW must close this gap and is hoping to gain technical insights and learning effects from Leapmotor, which exclusively offers battery-electric vehicles and range-extender models.
carnewschina.com
This article was first published by Sebastian Schaal for electrive’s German edition.
