Li Auto's chip subsidiary has completed its first round of equity financing, securing 1.625 billion yuan (about $229 million) in subscriptions, according to PCauto. The deal values the unit at up to 17.1 billion yuan (about $2.4 billion) if all additional subscription rights are exercised.
The funding round is led by Hangzhou Jingtao, Lanchi Ventures and Huaye Tiancheng, with Qiji Chuangtan also participating. Li Auto itself is contributing 1 billion yuan (about $141 million) through its wholly-owned entity, while external investors are putting in 625 million yuan (about $88 million). The agreement includes an option for Hangzhou Jingtao and its affiliated funds to subscribe for an additional 500 million yuan (about $70 million) by the end of 2026, which would bring total financing to 2.125 billion yuan (about $299 million).
After the transaction, Li Auto will retain about 74.01% of Mahe Xin Technology, maintaining its controlling stake and ensuring the automaker keeps a firm grip on its chip business.
From in-house supplier to external vendor
Mahe Xin Technology is responsible for Li Auto's chip and domain controller operations, building an integrated stack that combines chips, domain controllers and operating systems. Its core product, the Mahe M100 automotive AI chip, is built on a 5nm process and delivers 1,280 TOPS of computing power. The chip has already been installed in Li Auto's latest production models.
The proceeds from this round will be used for continued chip development and commercialisation. Beyond supplying Li Auto's own vehicles, Mahe Xin Technology plans to sell its chips to external customers and explore applications outside the automotive sector, aiming to spread research and development costs over larger volumes.
Li Auto is also pushing other self-developed components, such as silicon carbide modules and range extenders, into external supply. This mirrors a broader trend among Chinese automakers of spinning off in-house upstream technology into independent business units to create new revenue streams and offset heavy R&D spending.
Developing chips in-house is capital-intensive and slow, so independent financing helps share the burden and can be used to incentivise core technical staff through equity. With this round complete, Mahe Xin Technology's commercialisation is expected to accelerate, though details on external customers, use cases and revenue projections are still to be disclosed.
