Author: Tan Qing on AI

Today, let's delve into a topic that's both enchanting and grounded in reality.

FAW, often hailed as the automotive industry's venerable elder and a symbol of longstanding financial stability, has taken a rather unconventional step today.

It has invested in Leapmotor.

Not just a modest sum of 300 or 500 million, but a substantial 3.7 billion yuan in cash, securing a 5% stake in Leapmotor.

Imagine your traditionally conservative, suit-and-tie-wearing uncle, who sips wolfberry tea from his thermos, suddenly downloading Genshin Impact and splurging 648 yuan for in-game purchases.

Then, he sheepishly approaches you, saying, "Nephew, um... how do you beat the Abyss? Could you show me?"

Why Did the Established and the Emerging Collaborate?

Who is FAW?

It's a "century-old brand" in the automotive sector, boasting a red heritage and industrial prowess since Chairman Mao penned the name "The First Automobile Works."

Its Jiefang trucks can bear the weight of a nation's aspirations; its Hongqi cars shine brightly during military parades.

Yet, times change swiftly, more rapidly than a girlfriend's whims.

When the new energy wave surged, everyone realized that car manufacturing had undergone a transformation.

In the past, it was about who had the most powerful engine, the smoothest gearbox, or whose chassis could navigate speed bumps seamlessly.

Now, it's about who boasts a larger, more interactive screen, whose autonomous driving mimics a seasoned chauffeur, and whose battery doesn't falter in winter, turning into an "electric dud."

FAW, with its seventy years of accumulated expertise, suddenly recognized that a new era had dawned.

At that moment, it turned and noticed Leapmotor.

A "newcomer" born in 2015, founded by Zhu Jiangming, originally from the security and surveillance industry (Dahua Technology), a classic example of a "crossover automaker."

Yet, this "underdog" quietly devised a "full-domain self-research" strategy, encompassing everything from batteries and electric drives to intelligent cockpits and autonomous driving platforms. Despite facing setbacks, skepticism, and predictions of doom, it managed to ascend to the forefront of the new forces.

FAW glanced at itself, then at Leapmotor, and smiled benevolently yet awkwardly.

Thus, these 3.7 billion yuan weren't merely an investment in shares; they were an acquisition of a "guide to the new version."

A fast pass to the "intelligent electric vehicle dungeon."

Li Tengfei described this as "the first instance of a state-owned enterprise taking a stake in a new force," a statement rich in implications.

What Did Leapmotor Gain?

Money, undoubtedly, is part of the equation.

But more significantly, it's a stamp of approval, a certification, and a letter of trust.

In the future, when Leapmotor embarks on brand promotion, it can casually mention, "FAW is our shareholder."

Instantly elevating its image from a "startup" to something more prestigious.

This move propels Leapmotor to new heights.

5% Stake: A Masterful "Commercial Ballet"

The figure 5% is ingeniously chosen.

It's ingenious because it allows for "offense, defense, and a delicate dance in between."

For FAW:

5% signifies that I'm a significant stakeholder, I secure a board seat, and I have a voice in major company decisions. But I don't wield control; the reins remain with Team Zhu. If it succeeds, I share in the profits and acquire new skills; if there's risk, I'm not left crippled.

This is termed "risk-isolated learning," akin to enrolling in a pricey MBA primarily for networking and insights rather than to actually work for the company.

For Leapmotor and Zhu Jiangming:

This 5% serves as a "safety net."

It brings in resources and endorsement from a giant without the risk of "unwanted visitors" knocking on the door. Zhu's declaration, "We guarantee the founding team's control," is a reassurance to all potential investors, partners, and employees.

Moreover, Leapmotor's "equity triangle" is expertly crafted: the founding team steers the ship, international behemoth Stellantis (with brands like Maserati and Jeep) aids in expanding its global reach, and domestic leader FAW stabilizes its base.

This setup is akin to gaming with divine gear, having top-tier teammates heal you, and still being the team captain.

If you can't achieve results with this, it's somewhat indefensible.

Indeed, Leapmotor is now a formidable contender. According to the Tianyancha App, it has achieved profitability.

In November, Leapmotor's sales surpassed 70,000 units.

Now, it's a mini BYD, and we eagerly anticipate even greater development for Leapmotor in the future.