Xiaomi has joined Li Auto as a strategic investor in Sunwoda's electric-vehicle battery business, according to PCauto. The company's wholly-owned subsidiary, Hanxing Venture Capital, invested 1.7 billion yuan (about $239 million) in Sunwoda Power, the battery unit of Shenzhen-listed Sunwoda (300207.SZ). The deal gives Xiaomi a 5.34% stake, making it the third-largest shareholder after Sunwoda itself and Li Auto.
New shareholder structure and control change
The investment will be used to subscribe to newly issued capital in Sunwoda Power. Following the transaction, Sunwoda's parent company's stake in the battery unit will drop to 22.78%, while Li Auto holds 8.32% and Xiaomi 5.34%. With the capital increase and an upcoming board reshuffle, Sunwoda will no longer hold a majority of board seats or maintain control over Sunwoda Power. The unit will be reclassified from a controlled subsidiary to an associate, and will be deconsolidated from Sunwoda's financial statements starting in the fourth quarter of this year. The company estimates the change could add 3.2 billion to 4.5 billion yuan (about $451 million to $634 million) to its 2026 net profit, pending audit results.
Unlike a purely financial investment, Xiaomi's move is an industrial capital play. The two companies already have a working relationship: the 52 kWh lithium iron phosphate battery pack in the Xiaomi Pengcheng N70 Pro uses cells supplied by Sunwoda Power. For Xiaomi's EV arm, the stake helps secure battery supply capacity and deeper involvement in cell technology development, including cell specifications, fast-charging solutions, and battery safety, reducing supply-chain volatility. For Sunwoda Power, the investment brings strategic funding and real-world application scenarios, enabling closer collaboration with both Xiaomi and Li Auto in vehicle integration, operating-condition calibration, and battery pack development.
Deepening collaboration
The investment follows a strategic partnership announced on September 4, in which Xiaomi and Sunwoda Power agreed to collaborate across the full battery value chain. The model goes beyond traditional supply-demand relationships: Xiaomi contributes vehicle requirements, system definitions, and quality standards, while Sunwoda brings cell technology, manufacturing capability, and industry experience. The two sides aim to involve vehicle needs earlier in battery development and to better align cell expertise with the overall vehicle experience.
With both Li Auto and Xiaomi now holding stakes, Sunwoda Power's shareholder base includes two major EV makers, a setup that could help the battery supplier tailor its products more closely to real vehicle requirements. The move also reflects a broader trend of Chinese automakers investing directly in battery suppliers to lock in capacity and technology as competition intensifies in the EV market.
