Li Auto Invests $390 Million in Sunwoda EVB for Battery Partnership

Li Auto Plans Major Investment in Sunwoda EVB

Li Auto plans to invest 2.65 billion yuan ($390 million) in Sunwoda Electric Vehicle Battery Co Ltd, strengthening its financial and business relationship with the power battery manufacturer. The investment will involve subscribing for newly issued shares and give Li Auto an 8.79% stake in Sunwoda EVB upon completion, making the automaker its second-largest shareholder. A Li Auto-related company already owns shares in the battery subsidiary. Following the capital increase, Leading Ideal HK Limited will indirectly hold a combined 11.17% stake through two entities, significantly increasing Li Auto's ownership and influence in the battery business.

Funding Round Increases Sunwoda EVB Valuation

Sunwoda Electric Vehicle Battery Co Ltd disclosed the Series C++ funding plan 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 applied in the company's previous Series C and Series C+ rounds. Sunwoda EVB was valued at 27.49 billion yuan before the transaction and approximately 30.14 billion yuan afterward. Sunwoda's ownership, held through a subsidiary, will decline to 24.06% from 26.38%, although the company said it will retain control and continue consolidating Sunwoda EVB in its financial statements.

Long-Term Battery Technology Partnership

Li Auto has not issued a formal statement about the transaction, but the company told Chinese media outlet National Business Daily that the investment represents more than a financial commitment. The two companies plan to establish a longer-term partnership focused on battery technology, manufacturing quality, and user value. Li Auto will continue leading product definition, performance targets, quality standards, and key technology development. Sunwoda EVB will contribute engineering, manufacturing, and supply chain capabilities to help move battery technologies into mass production, creating closer integration between battery development and vehicle requirements.

Li Auto Expands Its Battery Development Strategy

Li Auto previously invested 400 million yuan in Sunwoda EVB's Pre-A funding round in 2022, obtaining approximately a 3.2% stake upon completion. That ownership was gradually diluted through subsequent funding rounds, while the latest investment is expected to substantially increase Li Auto's ownership and influence. The companies also established Shandong Li Auto Automobile Battery Co Ltd in 2025 with registered capital of 300 million yuan and equal 50% ownership. The joint venture is primarily responsible for producing batteries developed by Li Auto, further connecting the automaker's battery research and development activities with manufacturing capabilities.

In-House Batteries and Diversified Supply

Li Auto has developed research and development capabilities covering battery cell systems, battery pack structures, thermal management, and battery management system algorithms. Management said during the company's second-quarter earnings call late last month that Li Auto plans to begin using its internally developed batteries in more models during the second half of 2026. Despite expanding internal capabilities and its ownership position in Sunwoda EVB, Li Auto plans to maintain a diversified battery supply system. The automaker also signed a five-year strategic cooperation agreement with CATL in September 2025 covering battery safety, ultra-fast charging technology, and domestic and overseas operations.

Sunwoda EVB Strengthens Capital Position

Sunwoda said the new 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 during the first half of 2026 and recorded a net loss of 324 million yuan. The subsidiary is one of China's major power battery manufacturers and installed 2.66 GWh of batteries in China in July. That volume placed it seventh in the country's battery installation rankings, representing a 3.59% market share according to data from the China Automotive Battery Innovation Alliance.

Ownership Structure and Future Listing Remain Important

Sunwoda cautioned that the increasingly dispersed ownership structure could weaken its control over Sunwoda EVB. The subsidiary could eventually be deconsolidated if Sunwoda cannot maintain decision-making control at shareholder and board levels. Sunwoda had proposed spinning off Sunwoda EVB for a separate listing on Shenzhen's ChiNext market in 2023, after which the subsidiary began IPO counseling. However, no material progress on the proposed listing has been disclosed since then. The latest investment therefore adds a significant shareholder relationship while also supporting Sunwoda EVB's financial position and continued development as a major power battery manufacturer.

Frequently Asked Questions

How much is Li Auto investing in Sunwoda EVB?
Li Auto plans to invest 2.65 billion yuan, equivalent to approximately $390 million, in Sunwoda Electric Vehicle Battery Co Ltd through a subscription for newly issued shares. The transaction will give Li Auto an 8.79% stake upon completion and make it the battery manufacturer's second-largest shareholder. Together with an existing indirect holding through Leading Ideal HK Limited, Li Auto-related entities will hold a combined 11.17% stake. The investment is also intended to support longer-term cooperation in battery technology, manufacturing quality, and supply chain capabilities.