China’s Leapmotor to sell $534m stake to state-owned carmaker

Zhejiang Leapmotor Technology has agreed to sell a 5% stake for 3.7 billion yuan (US$534 million) to FAW Group, a state-owned automaker in China.

The deal, announced December 29, is still subject to approval from China’s securities regulator and may take several months to close.

Leapmotor, which operates a joint venture with Stellantis to distribute EVs globally, is among several players in China’s crowded EV market.

China’s government has urged state-owned firms like FAW to consolidate the industry as slowing demand and excess capacity have triggered ongoing price wars and squeezed profits.

🔗 Source: Bloomberg

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Implications, context, and why it matters.

FAW’s 5% buy-in lacks detail, so upside is uncertain

Deal worth 3.7 billion yuan values the company at about 74 billion yuan. Its stock rose about 200% earlier in 2025. 1
No word on board seats, factory work, or tech sharing. That leaves unclear whether FAW Group, a state-owned automaker, gains EV heft or this is just cash for Leapmotor.
CSRC approval is required. Closing may take months, which adds execution risk. Leapmotor delivered 50,129 vehicles in July 2025, a 126% year-over-year (YoY) gain 2 and posted its first half-year profit in 2025 with a 14.1% gross margin. 3
Beijing seeks fewer EV brands to cut overcapacity. No manufacturing tie-up or procurement is public, so the FAW and Leapmotor deal looks financial, not operational.

Charging and aftermarket firms can ride Leapmotor’s Europe push

From January to July 2025 the company exported 24,980 vehicles, the most among Chinese New Energy Vehicle (NEV) startups. Europe led, with July orders above 4,000 units, a record. 3
Charging firms can time buildouts with Leapmotor International, the distribution joint venture with Stellantis (a multinational automaker). The network spans nearly 600 sales and service sites in 30 markets, over 550 in Europe. A Europe plant is planned by late 2026. 3
First B10 batch to Europe was slated for sale at IAA MOBILITY 2025 in Germany in September. Local C10 assembly began at Stellantis’ Gurun plant in Malaysia on August 7, 2025, enabling mass production. 3