- Leapmotor agreed to invest in FAW’s Qixin Power and sign battery R&D deals, formalizing a broader strategic partnership to bring key powertrains and joint models closer to in-house control.
- Leapmotor will sell FAW 74.8322 million domestic shares for RMB 3.744 billion (about $557.2 million), reported H1 revenue RMB 38.11 billion (about $5.67 billion) and H1 net profit RMB 210 million (about $31.2 million).
- The moves target rivals in midmarket EVs and legacy OEM hybrids, but execution risks include integrating supply chains, scaling Qixin Power production, margin pressure and tight delivery timing.
Leapmotor and China FAW held a signing ceremony in Huzhou, Zhejiang, on Sept. 17, with Leapmotor signing a letter of intent to invest in FAW’s Qixin Power and a technology cooperation agreement with China Automotive New Energy Battery Technology Co.
The agreements represent the first concrete implementation of the companies’ agreement to deepen strategic cooperation signed on August 24.
Under the earlier agreement, the two sides plan to cooperate across 10 areas, including capital investment, new-energy vehicles, intelligent driving, powertrains, power batteries, smart chassis and embodied-intelligence robots.
Their first jointly developed vehicle is already nearing mass production, while Qixin Power’s hybrid engines have begun supplying Leapmotor’s global models.
The capital relationship is also moving forward. On September 16, Leapmotor said it had received approval from the China Securities Regulatory Commission to register its proposed share issuance to specific investors.
FAW plans to subscribe for 74.8322 million domestic shares of Leapmotor for RMB 3.744 billion ($557.2 million), giving FAW an approximately 5% stake after completion of the transaction.
The subscription agreement was originally signed in December 2025. The latest registration approval means the relevant regulatory review process has been completed.
Under the latest agreements, Leapmotor plans to participate as a strategic investor in Qixin Power’s Series A funding round.
The two sides will cooperate on hybrid engines, electric-drive systems and range extenders, with a focus on technology development and resource sharing.
Some Leapmotor models previously used range extenders supplied by Dongan Power.
The cooperation with Qixin Power could gradually shift its range-extender powertrain strategy from external sourcing toward joint development within the broader partnership.
On batteries, Leapmotor and China Automotive New Energy Battery Technology plan to collaborate on four areas: solid-state batteries, lithium-rich manganese-based batteries, sodium-ion batteries and ultra-fast-charging lithium iron phosphate batteries.
Leapmotor’s push to deepen supply-chain cooperation comes amid continued pressure on profitability.
In the first half of 2026, the company generated revenue of RMB 38.11 billion ($5.67 billion) and net profit of RMB 210 million ($31.2 million), extending its profitable streak to three consecutive half-year periods.
However, its gross margin fell to 11.7% from 14.1% a year earlier. Based on first-half deliveries, net profit was about RMB 589 ($87.7) per vehicle, leaving relatively limited room for further margin expansion.
With vehicle prices difficult to raise and raw-material costs increasing, securing key component supply through strategic investment provides Leapmotor with a direct way to improve cost control.
At the same time, Leapmotor is preparing for the next stage of product expansion.
At its technology day on September 16, the company unveiled its LEAP 5.0 architecture and three core technologies for new vehicle categories.
Founder, Chairman and CEO Zhu Jiangming said in a media briefing after the event that Leapmotor plans to launch a second brand in the fourth quarter of 2027.
The new brand is expected to target higher market segments and help increase per-vehicle gross profit.
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