China's domestic new energy industry has the largest scale: NIO's Series A financing reached nearly 5 billion yuan.

On November 17th, Lantu Auto announced the signing and delivery of the A-round financing agreement, with a financing of nearly RMB 5 billion and a post-financing valuation of nearly RMB 30 billion. This round of financing is the largest first-round financing in China’s new energy vehicle industry to date.

Investor Structure

Lantu Auto’s current round of financing has a total of 10 investors, led jointly by state-owned enterprises with strategic synergy and large state-owned financial institutions, with follow-up investments from state-owned capital, local state-owned capital, industry and private capital.

The joint lead investors are the State-owned Enterprise Mixed Reform Fund and Zhong Yin Assets, while the follow-up investors include three state-owned capital firms: Guoyin Investment, Nongyin Investment, and Jiaying Yuyuan. The local state-owned capital firms are Wuhan Economic Development Fund, Hubei High-quality Development Fund, and Zhongxin Gao Investment. The industry and private capital firms are Ganfeng Lithium and XWD.

Dongfeng Group concurrently participated in this round of financing, and after this round of financing, Dongfeng Group holds 78.88%, the A-round investors hold 12.37%, and the Lantu employee holding platform holds 8.75%.

Lantu Auto’s current round of financing investors have strategic synergistic relationships with Lantu Auto in mixed ownership and institutional mechanism reform, strategic business synergy, comprehensive financial services, and the three-electricity supply chain.

The funds raised in this round of financing will be used to support Lantu Auto’s main business operations and expansion, including technology research and development, marketing investment, digital system construction, and production capacity building. After this round of financing, Lantu Auto will initiate subsequent rounds of financing depending on specific circumstances.

Research and Development Strength

Currently, Lantu Auto’s R&D personnel account for 38% of the total number of employees. The number of core R&D personnel in October 2021 grew by 73% year-on-year. The average age of the team is 32.6 years old, and 38% of the team has a master’s degree or above. From 2020 to the present, Lantu Auto has accumulated a total of 1,771 patent applications in less than three years, including 1,450 invention patents, with an average of nearly 600 patent applications per year. The growth rate of patents is very considerable.The ESSA electric architecture of Landtour has complete proprietary intellectual property rights. Landtour’s independently developed central SOA electronic and electrical architecture is a leading software architecture in China. Landtour has complete proprietary knowledge of this architecture, with 71 invention patents and 22 breakthrough core technologies. Based on the ESSA and SOA architectures, Landtour claims to have also laid out leading technologies such as solid-state batteries, hydrogen power, and L4+ level autonomous driving.

Following the Landtour FREE and the DreamMaker, the third car model, the Landtour Chasing Light, is expected to debut in December this year. It will be equipped with the central SOA electronic and electrical architecture, and the new car has a certain level of competitiveness and technological strength in both hardware and software.

In the overseas market, in February 2022, Landtour officially announced its entry into the European market, with Norway as the first stop. In September, the Landtour FREE was officially shipped to Norway and will be delivered to Norwegian users at the end of this month. After the Norwegian market, starting in 2023, Landtour DreamMaker will also be officially launched in the European market, and Landtour will also enter four other countries: Sweden, the Netherlands, Denmark, and Israel.

Landtour Automotive CEO Lu Fang and CFO Shen Jun answered questions from reporters.Regarding the specific situation of LanTu Auto’s Series A Financing, a media Q&A session was arranged after the press conference concluded. LanTu Auto CEO Lu Fang and CFO Shen Jun presented a detailed introduction on this current round of financing, and responded to frequently asked questions.

Q1: What is the total amount of financing and market valuation for LanTu’s current round of financing? What was the financing process like? Mr. Shen, can you provide us with an introduction?

Shen Jun:

This Series A financing is the first external financing of LanTu Auto. The financing amount is nearly 5 billion yuan, which is the largest first round financing in the Chinese new energy vehicle industry to date, reflecting the market’s confidence in LanTu Auto’s future development.

After the financing, LanTu’s market valuation is close to 30 billion yuan. LanTu’s current round of financing has achieved investor structure optimization from the perspective of well-known leading investors and investor types. The investors include a mix-ownership reform fund and China CITIC Bank Asset Management as joint lead investors, and three state-owned capital participants, namely ICBC Investment, AgBank Investment and CCB, as co-investors. The local state-owned participants are Wuhan Economic Development Fund, Hubei High-Quality Development Fund and Zhongxin High-tech Investment, with Ganfeng Lithium and Xinwanda Holdings as industry and private capital. Dongfeng Motor Group is also following-up in this round of financing. After this round of financing, Dongfeng Motor Group holds 78.88\%, the Series A investor holds 12.37\%, and the employee shareholding platform holds 8.75\%.

Q2: What are the characteristics of the investors introduced by LanTu Auto, and what factors were considered?

Shen Jun:

In December 2021, LanTu Auto’s Series A financing was officially launched. Since the project launch, it has received investment attention from more than 100 market-oriented investment institutions.

LanTu Auto has always adhered to the principles of introducing investors with high marketization, strong strategic synergy, good market reputation, and strong financial strength. After multiple rounds of business negotiations with potential investors, Dongfeng Motor Group and LanTu Auto’s management carefully screened and selected investors, following the principle of prioritizing marketization, ultimately determining the range of qualified investors and the overall financing scale in this round.

LanTu’s current round of financing not only has state-owned leading investors with strategic synergies and large-scale state-owned financial institutions, but also active participation from state-owned capital, local state-owned capital, industry and private capital. Investor structure optimization has been achieved from the perspectives of well-known leading investors and investor types.

Q3: What is the main use of funds for LanTu’s financing? Are there any specific plans? Besides funding, what additional resources or industrial support can the investors introduced in this round of financing bring to LanTu? What are the cooperation points between the two sides? Mr. Shen, please respond.Shen Jun:

The funds raised in this round will be used to support the development of Lantu’s technology, digital system construction, production capacity building, and marketing investment related to Lantu’s main business operations and expansion. It is expected that more than 40% of the expenses will be used for technology research and development.

The investors in this round of financing for Lantu Automobile have a strategic synergistic relationship with Lantu Automobile, especially in the areas of mixed ownership and institutional mechanism reform, strategic business cooperation, comprehensive financial services, and the three-electric supply chain. The integration of resources and complementary advantages with Lantu Automobile will establish a co-existing and resourceful industry ecology. A balanced and diversified investor lineup will further enhance the brand value of Lantu Automobile and provide more strategic and industrial resources for its future development.

Q4: How much did Dongfeng Group invest in Lantu in this round of financing? What are Dongfeng’s expectations for Lantu in the capital market?

Shen Jun:

Dongfeng Group invested 900 million yuan in Lantu’s current round of financing. After this round of financing, Dongfeng Group holds 78.88% of the shares. Dongfeng Group firmly and continuously supports the development of Lantu, and hopes that Lantu will undertake the dual mission of enhancing Dongfeng’s brand and exploring new development models for independent brands. Through market-oriented operation, it can effectively utilize the allocation advantages of capital market resources, deepen the reform of state-owned enterprises, and promote high-quality development of state-owned capital and state-owned enterprises.

Q5: Why did Lantu need to raise funds? What strategic considerations led Dongfeng Group to support Lantu’s fundraising?

Lu Fang:

The reason for Lantu’s fundraising is to form industrial synergy through empowering collaboration, especially in the upstream and downstream industry chains such as the three-electric components and marketing ecosystems, and achieve complementarities with investors to further accelerate the development of Lantu’s business. Another reason is to continue to implement the relevant requirements of the “Double Hundred Enterprises” mixed reform, improve the company’s governance structure, activate institutional mechanisms, further enhance the preservation and appreciation of state-owned capital, enhance the competitiveness of state-owned economy, and amplify the functions of state-owned capital.

Q6: The current industry reshuffling trend is obvious and the overall environment of the capital market is not very good. Under such circumstances, why can Lantu still successfully raise so much funds? What core competencies of Lantu do investors recognize?

Lu Fang:

The current international economic situation is grim, and the overall capital market is sluggish. Under such complex conditions, Lantu Automobile’s post-investment valuation in this round of financing is nearly RMB 30 billion, maintaining relatively objective and reasonable pricing, reflecting the full recognition and sufficient confidence of primary market investors for Lantu Automobile’s investment value. In the communication process with investors, we noticed that investors most recognized Lantu’s core competencies mainly in the following areas:First, Lantu has a complete technical research and development system and leading technical research and development capabilities.

Second, Lantu’s technical roadmap and strategic layout are in line with the direction of the industry race track. Lantu’s ESSA native intelligent electric architecture concept and technology can meet the technological needs of Lantu for the next 8-10 years, and its technical ability is in a leading position in the industry. The concept and technology of the central centralized SOA electronic and electrical architecture can meet Lantu’s technological needs for the next 5 years.

Third, there is a complete range of high-end product categories and good market expectations. Lantu completed its category strategy across three major categories of SUVs, MPVs, and sedans within three years, making it the Chinese new energy automotive brand with the most complete product layout. Since June of this year, Lantu’s car sales have maintained month-on-month growth for 5 consecutive months, with an average unit price of over RMB 3.82 million. The third sedan, “Chaser,” will be released next month.

Fourth, a market-oriented, flexible, and efficient institutional mechanism. Lantu is efficient, innovative, flat, and pragmatic in terms of institutional mechanisms, talent team-building, and corporate governance models.

Q7: What is the strategic significance of this round of financing for the development of Lantu?

Lu Fang:

The successful introduction of strategic investment in this round of financing will enable the investment party and Lantu to form industrial synergy in the areas of mixed ownership and institutional mechanism reform, strategic business collaboration, comprehensive financial services, and the three-electricity supply chain. This will help Lantu form a new ecological environment of integration and symbiosis, and further empower the sustainable development of Lantu’s business.

Moreover, Lantu will effectively leverage the resource allocation advantages of the capital market, deepen the reform of state-owned enterprises, and resolutely strengthen, optimize, and expand state-owned capital and state-owned enterprises, promoting the healthy development of the capital market, which is the duty and mission of central enterprises. In March 2022, Lantu Automotive was selected as one of the “Double Hundred Enterprises” by the State-owned Assets Supervision and Administration Commission of the State Council. As a “Double Hundred Enterprise,” Lantu needs to undertake the important responsibility of leading state-owned enterprise reform and play a role in demonstrating breakthroughs in reform.

At the same time, Lantu bears the dual mission of driving the Dongfeng brand upward and exploring new models for the development of independent brands, and full participation in market competition through financing can help Lantu become a pioneer of the state-owned enterprise reform with a scientific and sound governance structure, flexible and efficient operating mechanism, and significantly improved innovation and market competitiveness, and promote the reform of Dongfeng Group’s institutional mechanism.

In conclusion

Following the end of this round of series A financing, there were reports that Lantu’s next move was to go public. Regarding this, Shen Jun did not give a positive reply, saying, “Lantu will consider the comprehensive market and regulatory policies and plans for subsequent IPO plans. Please refer to Lantu’s subsequent announcements for specific capital operation plans.”The abundant financial support has provided LANTECH with confidence in both product research and marketing. As planned previously, LANTECH will strategically deploy a new type of car each year in the future, expanding into more subdivided markets in the SUV, MPV, and sedan fields to meet differentiated user needs. This year’s plan is to release the sedan Chasing Light in December.

Among the “New Forces” of the automobile industry, LANTECH’s performance is not particularly eye-catching. However, in terms of research and development investment and capital reserves, LANTECH’s long-term development is promising. As a state-owned enterprise, LANTECH has a natural advantage over new energy vehicle companies in terms of technology research and development talent reserves and financing.

However, it is necessary to consider how to maintain internal vitality, avoid redundant and cumbersome organizational structures, and improve sensitivity to technology and product competitiveness.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email