A Li L6 is displayed at the Beijing Auto Show in April 2026.
- Li Auto will directly hold an 8.79% stake in Sunwoda’s power battery unit, while its related entities will have a combined stake of 11.17%.
- Li Auto said the deal is more than a financial investment and will establish a longer-term partnership in battery technology and manufacturing quality.
Li Auto (NASDAQ: LI; HKEX: 2015) plans to invest 2.65 billion yuan ($390 million) in Sunwoda’s power battery subsidiary, further strengthening the companies’ financial and business ties in the battery sector.
The automaker will subscribe for newly issued shares in Sunwoda Electric Vehicle Battery Co Ltd (Sunwoda EVB), giving it an 8.79% stake upon completion of the transaction and making it the battery maker’s second-largest shareholder.
A Li Auto-related company already holds a stake in Sunwoda EVB. After the capital increase, Li Auto’s shareholder Leading Ideal HK Limited will indirectly hold a combined 11.17% stake through the 2 entities.
Sunwoda disclosed the Series C++ funding plan for Sunwoda EVB in a stock exchange filing on Friday. The transaction has received board approval and does not require shareholder approval.
The funding round uses the same pricing as Sunwoda EVB’s previous Series C and Series C+ rounds. The company was valued at 27.49 billion yuan before the transaction and about 30.14 billion yuan after Li Auto’s investment.
Sunwoda’s stake in Sunwoda EVB, held through a subsidiary, will be diluted to 24.06% from 26.38%. The company said it will retain control of Sunwoda EVB and continue to consolidate the unit in its financial statements after the transaction.
However, Sunwoda cautioned that the more dispersed ownership structure could weaken its control. Sunwoda EVB could be deconsolidated if Sunwoda is unable to maintain decision-making control at shareholder and board levels in the future.
Li Auto has not issued a statement about the transaction. However, the company told Chinese media outlet National Business Daily that it is more than a financial investment and that the 2 companies will establish a longer-term partnership around battery technology, manufacturing quality and user value.
Li Auto will continue to lead product definition, performance targets, quality standards and key technology development, while Sunwoda EVB will provide engineering, manufacturing and supply chain capabilities to bring the battery technologies into mass production, the report said.
In 2022, a Li Auto unit invested 400 million yuan in Sunwoda EVB’s Pre-A funding round, acquiring a stake of about 3.2% upon completion of the transaction.
That stake was gradually diluted as Sunwoda EVB conducted subsequent funding rounds. The latest investment will significantly increase Li Auto’s ownership and influence at the power battery maker.
The 2 companies also established Shandong Li Auto Automobile Battery Co Ltd in 2025 with registered capital of 300 million yuan, each holding a 50% stake. The joint venture is primarily responsible for producing batteries developed by Li Auto.
Li Auto previously said it has developed research and development capabilities covering battery cell systems, battery pack structures, thermal management and battery management system (BMS) algorithms.
The company plans to begin using its in-house-developed batteries in more models in the second half of 2026, management said during its second-quarter earnings call late last month.
Still, Li Auto will maintain a diversified battery supply system. It signed a 5-year strategic cooperation agreement with CATL in September 2025 covering battery safety, ultra-fast charging technology and domestic and overseas operations.
Sunwoda said the funding will strengthen Sunwoda EVB’s capital position and help reduce its debt-to-asset ratio.
Sunwoda EVB generated revenue of 15.53 billion yuan in the first half of 2026 and recorded a net loss of 324 million yuan.
Sunwoda proposed spinning off Sunwoda EVB for a separate listing on Shenzhen’s ChiNext market in 2023. The subsidiary subsequently began IPO counseling, but no material progress has been disclosed since then.
Sunwoda EVB is one of China’s major power battery manufacturers. It installed 2.66 GWh of batteries in China in July, ranking seventh with a 3.59% market share, according to data from the China Automotive Battery Innovation Alliance (CABIA).
Li Auto posted a second-quarter net loss of 1.7 billion yuan, while revenue fell 15.1% year-on-year to 25.7 billion yuan.
($1 = 6.7787 yuan)
