Chinese electric vehicle maker Leapmotor said on Monday that state-owned automaker China FAW Group will acquire a strategic stake in the company through a domestic share issuance worth about 3.744 billion yuan ($520 million), in a move that also includes joint engineering cooperation on powertrains.

The announcement followed Leapmotor’s 10th anniversary event, where founder, chairman and CEO Zhu Jiangmingreassured investors and the media that the founding team would retain control of the company despite FAW’s entry. “Agreements have been made to ensure that the founding team maintains actual control,” Zhu said, adding that FAW’s participation would strengthen the company’s stability and risk resilience.

Under the agreement, Leapmotor will issue approximately 74.83 million domestic shares to FAW at 50.03 yuan per share, representing about 20.47% of the expanded domestic share base and roughly 5% of total enlarged share capital.

The partnership also includes a collaboration with FAW’s affiliate Qixin Power to jointly develop and produce plug-in hybrid and range-extended powertrains. Zhu emphasized that such cooperation, along with backing from major shareholders, would help Leapmotor navigate potential risks in the competitive EV market.

Leapmotor, founded in 2015 and listed in Hong Kong in 2022, has grown rapidly, with expected deliveries of around 600,000 vehicles in 2025. The company has also partnered with Stellantis, which holds about 20% of Leapmotor, to support platform development and overseas expansion.

The FAW investment will fund research and development, working capital, and expansion of sales and service networks. Analysts say the deal illustrates a growing trend of legacy automakers taking stakes in EV startups to accelerate electrification and strengthen supply chain cooperation.