Stellantis buys 20% stake in VC-backed Chinese EV maker

Stellantis – the product of merger between Fiat Chrysler Automobiles and PSA Group that created the world’s fourth-largest car manufacturer – will acquire 194.3m of LeapMotor’s H-shares for HKD 43.80 apiece, according to a filing. This will amount to 17.4% of the total H-shares post-transaction and 14.53% of the company’s total issued shares.

LeapMotor’s stock jumped 11.5% to HKD 41.05 in early trading on October 26 before falling back to close at HKD 32.80. The company has a market capitalisation of around HKD 37.5bn.

Founded in 2015, LeapMotor was a spinoff from Dahua Technology, a partially state-owned company that sells video surveillance products and services. It received USD 1.75bn in private funding, according to AVCJ Research. This included rounds of CNY 4.3bn (USD 663m) and CNY 4.5bn in 2021 featuring several government investment entities, SDIC Capital, and CICC Capital.

Sequoia Capital China (now HongShan) provided LeapMotor’s pre-Series A of CNY 400m in early 2018 and re-upped in a CNY 2.5bn Series A later the same year. Following the IPO, which saw the company raise HKD 6.3bn, Sequoia remained one of the largest shareholders with a 6.1% stake as of October.

LeapMotor claims to be the most vertically integrated EV developer in China, with its power, autonomous driving, and smart cockpit systems all designed and developed in-house. It focuses on the mid-to-high-end segment, with vehicles priced at CNY150,000 to CNY 300,000.

Deliveries in 2022 amounted to 111,168 units, up 154.1% year-on-year. The C11, a mid-size crossover SUV, accounted for two in five EVs sold. It is one of three LeapMotor models to achieve mass production. Revenue for the 12 months ended December 2022 was CNY 12.4bn, up 295.4% year-on-year, while the net loss widened from CNY 2.8bn to CNY 5.1bn.

In addition to investing in the company, Stellantis will take the lead in a 51-49 joint venture between the two automakers. The JV will have exclusive rights for the export and sale, as well as manufacturing, of Leapmotor products outside Greater China. The goal is to boost Leapmotor’s sales in China and leverage Stellantis’ global presence to accelerate sales in other regions, starting with Europe.

Stellantis will have two seats on the Leapmotor board and appoint the CEO of the JV. It will also explore using Leapmotor’s cost-efficient EV ecosystem to help meet its own electrification targets. The company wants passenger car battery EVs (BEVs) to be responsible for all its European sales by 2030, while passenger car BEVs and light-duty truck BEVs will command 50% of the US market by the same date.

“As consolidation unfolds among the capable EV start-ups in China, it becomes increasingly apparent that a handful of efficient and agile new generation EV players, like Leapmotor, will come to dominate the mainstream segments in China,” said Stellantis CEO Carlos Tavares (pictured, left, with Jiangming Zhu, CEO of Leapmotor) in a statement.

“We feel it’s the perfect time to take a leading role in supporting the global expansion plans of Leapmotor, one of the most impressive new EV players who have a similar tech-first, entrepreneurial mindset to ours. Through this strategic investment, we can address a white space in our business model and benefit from Leapmotor’s competitiveness both in China and abroad.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Europe
• Technology
• Industrials
• Electric Vehicles
• Sequoia Capital
• HongShan
• CICC
• Growth capital