Li Auto has announced an equity financing round totalling 1.625bn yuan ($242.86m) for its chip and domain controller business, Shanghai Mahe Xin Technology (MHX Technology).
Under the agreements, Li Auto will provide 1bn yuan through a wholly owned subsidiary.
The remaining 625m yuan will come from external backers, including Hangzhou Jingtao, Lanchi Ventures, Huaye Tiancheng, and MiraclePlus.
Hangzhou Jingtao Additional Investor has also secured a one-off right to invest up to 500m yuan on or before 31 December 2026.
Any such follow-on capital will be priced at the same terms per unit of increased registered capital as the current subscription.
MHX Technology will introduce two share incentive schemes alongside the fundraising to reward and retain staff and key contributors.
Li Auto will keep majority control of the subsidiary and continue to consolidate its accounts.
If the incentive schemes and Hangzhou Jingtao's investment right are fully taken up, Li Auto's holding in MHX Technology will be roughly 74.01%.
The consortium of external investors will hold 6.58%, with the remaining 19.41% held by entities running the employee share schemes.
The standalone unit was set up to pursue broader industrial opportunities beyond automotive applications and gain economies of scale.
Capital from the financing will go towards research, development, and commercialisation efforts.
The transaction is subject to standard closing conditions.
Recently, Li Auto unveiled its European business strategy and premiered the European Li 6 at the Paris Motor Show.
As the company’s first model for Europe, Li 6 is scheduled to launch and begin deliveries in the Netherlands and Norway in the first quarter of 2027. Li Auto said it will establish local sales, delivery, aftersales, and service systems, with plans to gradually expand into more European markets.
In April, Li Auto established new distribution partnerships in the Middle East, as the Chinese battery electric vehicle (BEV) manufacturer steps up its global expansion.
The US Nasdaq-listed automaker has signed a distribution agreement with Al Fahim Motors in the UAE, where it plans to launch its extended-range L-series passenger vehicles this year.
The company also entered into a partnership with Mohamed Yousuf Naghi Motors in Saudi Arabia, where it also plans to launch its L-series models.
