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FAW Group Invests RM2.85B in Leapmotor Partnership

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FAW Group and Leapmotor executives shaking hands after signing the investment agreement, with electric vehicle concepts in the background, symbolizing their future collaboration and the RM2.85 billion investment.

 

Estimated reading time: 7 minutes

Key Takeaways

  • FAW Group's RM2.85 billion (3.74 billion yuan) investment grants it a 5% strategic stake in Leapmotor, aiming to co-develop new energy vehicles.
  • The partnership, formalized on December 28, 2025, includes a long-term technical collaboration on plug-in hybrid and extended-range EVs, with a jointly developed car due in 2026.
  • Half of FAW's investment is earmarked for R&D, underscoring a commitment to innovation and product development for the burgeoning NEV market.
  • Leapmotor, already backed by Stellantis and profitable in 2025 with nearly 600,000 units sold, is rapidly expanding globally with plans for 1 million sales next year and Spanish manufacturing.
  • This collaboration signifies a powerful synergy between a state-owned automotive giant and an agile EV innovator, setting a new benchmark for automotive partnerships and future market trends.

Table of Contents


Unveiling the Deal: RM2.85 Billion Reshapes the NEV Landscape

Could a single strategic investment redefine the future of electric vehicles globally? Today, we're diving deep into a monumental announcement that's sending ripples across the automotive world. We will explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next. This isn't just about capital; it's a bold play by China's state-owned automotive giant, FAW Group, injecting 3.74 billion yuan (approximately RM2.85 billion) into the rapidly ascending new energy vehicle (NEV) maker, Leapmotor. This pivotal move, sealed with an investment and cooperation agreement signed in Hangzhou on December 28, 2025, is poised to accelerate innovation, expand market reach, and potentially reshape the competitive dynamics of the global EV sector. The core question this article addresses is how this massive injection of capital and strategic collaboration will propel both companies forward, especially given Leapmotor's existing growth trajectory and global aspirations. We'll uncover the financial intricacies, the technical synergies, Leapmotor's impressive journey, and what this means for the future of NEVs, including a jointly developed car slated for a 2026 reveal.


Strategic Stakes and Technical Synergies: A Deep Dive into the Partnership

At the heart of this groundbreaking collaboration, FAW Equity Investment (Tianjin) has committed to purchasing just over 74.8 million shares in Leapmotor at 50.03 yuan (around RM38.20) per share. This significant acquisition grants FAW a 5 percent equity stake, officially designating it as a strategic shareholder in the innovative electric carmaker. For you, the informed investor or automotive enthusiast, this isn't merely a financial transaction; it's a strategic alignment that signals long-term commitment and mutual growth potential. Furthermore, the partnership extends beyond financial backing. FAW Qixin Power is set to work hand-in-hand with Leapmotor on the development of cutting-edge plug-in hybrid electric vehicles (PHEVs) and extended-range electric vehicles (EREVs). This technical partnership is particularly noteworthy, indicating a deep, synergistic approach to tackling diverse market demands and pushing the boundaries of NEV technology. This is precisely why it's critical to explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next, as it sets a precedent for future collaborations in the fast-evolving EV landscape.


Financial Fuel for Innovation and Growth: Where the RM2.85 Billion Goes

The financial breakdown of FAW's colossal investment reveals a clear strategic allocation designed to maximize impact. Approximately half of the 3.74 billion yuan (RM2.85 billion) will be directly channelled into research and development (R&D). This substantial commitment to R&D is a powerful testament to the partnership's focus on technological advancement and innovation, vital for staying competitive in the rapidly evolving NEV market. The remaining half of the funds will be split evenly, dedicated to bolstering working capital and fuelling initiatives aimed at growing Leapmotor's sales and aftersales network. This balanced approach ensures that while innovation is prioritized, the practical aspects of market penetration and customer support are not overlooked. This investment marks another critical milestone in the companies' relationship, which first gained public attention in March 2025 when a memorandum of understanding (MoU) for NEV cooperation and parts supply chain development was signed. While earlier rumors of FAW acquiring a 10 percent stake were publicly denied, this current deal firmly establishes a robust and forward-looking collaboration, providing a crucial framework to explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next for both entities.


Leapmotor's Meteoric Rise: A Global Force to Reckon With

FAW's strategic involvement comes at a compelling juncture, set against the backdrop of Leapmotor's truly meteoric rise in the global EV market. For years, the industry watched as startups struggled to reach profitability, but Leapmotor emerged as one of the few Chinese EV newcomers to report a net profit in 2025, a clear indicator of its robust business model and efficient operations. Its annual sales neared an impressive 600,000 units in the same year, showcasing significant market acceptance and rapid consumer adoption. This incredible growth hasn't gone unnoticed by global automotive titans. Stellantis, one of the world's leading automakers, became a major stakeholder in late 2023 with a substantial EUR 1.5 billion (about RM7.06 billion) investment, securing a 20 percent share. This prior investment from Stellantis, coupled with FAW's new capital injection, solidifies Leapmotor's position as a formidable player. The company's ambitions are unequivocally global, with aggressive plans to hit 1 million cars sold worldwide next year. Crucially, Leapmotor is also preparing to commence manufacturing operations in Spain, signalling its serious intent to penetrate and establish a strong presence in international markets. This trajectory makes it essential to explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next for a company that is rapidly becoming a global EV powerhouse.


The Road Ahead: Joint Ventures and Global Ambitions

The future looks exceptionally bright for this newly forged partnership. Leapmotor's chairman, Zhu Jiangming, has officially confirmed that the first fruit of this collaboration will be unveiled in 2026: a brand-new model co-developed with FAW. This eagerly anticipated vehicle will mark a significant milestone, representing the synergy between a state-owned automotive titan like FAW and a nimble, innovative private EV manufacturer like Leapmotor. This joint development isn't just about creating a new car; it's about combining FAW's extensive manufacturing experience and supply chain prowess with Leapmotor's agility and advanced NEV technology. In parallel with this exciting venture, Leapmotor is strategically preparing to launch two flagship models – the D19 SUV and the D99 minivan. These new additions will broaden its lineup, with their extended-range versions boasting powerful 80.3 kWh batteries, demonstrating Leapmotor's commitment to offering diverse and high-performance options to a global audience. As Leapmotor expands its footprint beyond China, these new models and the FAW partnership will be instrumental in achieving its ambitious goal of 1 million cars sold worldwide. This strategic blend of investment, technical collaboration, and product expansion is precisely why we must explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next for global market share and technological innovation.


What's Next for the Automotive Industry?

This partnership between FAW Group and Leapmotor is more than just a financial deal; it's a blueprint for the future of the automotive industry. It highlights several critical trends: the increasing dominance of New Energy Vehicles, the importance of strategic international collaborations, and the continuous push for innovation, particularly in battery and powertrain technologies. For consumers, this could mean access to more advanced, efficient, and affordable EVs sooner than anticipated. For investors, it signals robust growth opportunities within the NEV sector, especially for companies demonstrating strong partnerships and global ambitions. As we continue to explore FAW Group's RM2.85 billion investment in Leapmotor. Understand the strategic implications of this automotive partnership and what's next, one thing is clear: the landscape of automotive manufacturing and sales is undergoing a profound transformation. Keep an eye on the 2026 reveal, as it promises to be a game-changer. This collaboration also underscores the strategic imperative for traditional automakers to partner with agile EV startups to maintain relevance and drive innovation in a rapidly changing market. The blending of established industrial might with entrepreneurial dynamism is setting a new standard for how automotive giants will navigate the shift to electrification.


What's Next? Your Turn to Drive the Conversation!

We've peeled back the layers of FAW Group's groundbreaking RM2.85 billion investment in Leapmotor, exploring the strategic vision, financial muscle, and technological ambitions behind this automotive alliance. Now, we want to hear from you!

What are your predictions for the jointly developed car coming in 2026? How do you think this partnership will impact the global EV market, particularly in competitive regions like Europe or Southeast Asia? Share your insights, theories, and questions in the comments below. Let's foster a dynamic discussion about the future of New Energy Vehicles and the power of strategic partnerships!

And if you found this deep dive valuable, consider sharing it with your network. Your engagement helps us continue delivering cutting-edge analyses of the automotive world. Don't forget to explore our other articles on EV trends and market movements for more expert insights!


Frequently Asked Questions (FAQs)

Q1: What is the primary purpose of FAW Group's RM2.85 billion investment in Leapmotor?
A1: The primary purpose is multi-faceted: to acquire a 5% strategic equity stake in Leapmotor, foster a long-term technical partnership for developing plug-in hybrid and extended-range electric vehicles, and inject significant capital into Leapmotor's R&D, working capital, and sales/aftersales network expansion. This move aims to accelerate innovation and global market penetration for both entities.

Q2: How does this investment relate to Leapmotor's existing partnership with Stellantis?
A2: FAW's investment complements Leapmotor's existing partnership with Stellantis. Stellantis became a major stakeholder in late 2023 with a EUR 1.5 billion investment for a 20% share. The FAW deal adds another layer of strategic partnership and financial backing, further solidifying Leapmotor's position as a global EV player and broadening its technological and market reach.

Q3: When can we expect to see the first vehicle co-developed by FAW and Leapmotor?
A3: Leapmotor's chairman, Zhu Jiangming, has confirmed that a new model co-developed with FAW will be unveiled in 2026. This vehicle will be the first tangible result of their collaborative efforts in NEV development.

Q4: How will the RM2.85 billion investment be utilized by Leapmotor?
A4: Approximately half of the investment will be channeled into research and development (R&D) to drive technological innovation. The remaining amount will be split evenly between enhancing working capital and funding initiatives to expand Leapmotor's sales and aftersales network, both domestically and internationally.

Q5: What are Leapmotor's global ambitions and current market standing?
A5: Leapmotor has ambitious global plans, aiming to sell 1 million cars worldwide next year and to begin manufacturing in Spain. It's one of the few Chinese EV startups to report net profit in 2025, with annual sales nearing 600,000 units, indicating strong growth and market acceptance. This partnership with FAW is expected to further fuel these global expansion efforts.


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