A new alliance is emerging as a turning point for the automotive industry. FAW, the Chinese giant, is investing €420 million in Leapmotor, a promising manufacturer. This partnership could well propel Stellantis to new heights by enriching its portfolio of electric and plug-in hybrid models.
An ambitious investment
In China, a bold collaboration has just been sealed. The FAW group, state-owned, has decided to inject a colossal sum of €420 million into Leapmotor. This initiative aims to develop new models that will debut as early as next year, with a first presentation expected in 2027 or, at the latest, 2028. This investment is not merely a financial transaction but a genuine boost for innovation in the electric sector.
Work on electric, EREV and PHEV
The cooperation between FAW and Leapmotor did not come out of nowhere. The two companies had already discussed the possibility of joining forces for several years. Last August, there was even talk of FAW taking a 10% stake in the Hangzhou-based manufacturer. Ultimately, relations intensified, with FAW acquiring 5% of Leapmotor by purchasing nearly 75 million shares at a price of 50.03 yuan (approximately €6.04).
This ambitious partnership will enable the development of low environmental impact vehicles, including electric models, range-extended vehicles, and plug-in hybrids. The allocation of funds is clear: 50% of the investment, approximately €210 million, will be dedicated to research and development. 25% will finance working capital for general objectives, while the remaining 25% will be used to expand the sales and support network. But what role does Stellantis play in this dance?
- Research and development: €210 million
- Integration of working capital: €105 million
- Extension of the sales and support network: €105 million
Stellantis can benefit
Stellantis, which has already invested heavily in Leapmotor, holds 51% of Leapmotor International, the company responsible for marketing vehicles beyond Chinese borders. The acceleration of new model development thanks to FAW‘s contribution looks promising for the Italian-French group. A boon to enrich its evolving portfolio.
This alliance will not only expand Leapmotor’s offering, which currently consists of two SUVs, the B10 and C10, as well as the city car T03, but it could also provide access to technologies developed in China that could be leveraged across other models within the Stellantis group. This may seem futuristic, but it is undeniable that global balances in mobility are evolving rapidly, and Chinese cars are asserting themselves as an increasingly viable alternative on the old continent.
