Li Auto's semiconductor business is pursuing its first external funding round at a pre-money valuation of about 15 billion yuan ($2.22 billion), local outlet LatePost reported Monday, with the Chinese EV maker aiming to raise several billion yuan for the unit.

The number sets Li Auto's chip ambitions well above the benchmark set by its closest comparable. Nio's chip subsidiary, GeniTech Co Ltd (Shenji), closed a 2.257 billion yuan first round in February at a post-money valuation of roughly 8.27 billion yuan, according to Nio's own statement. Post-financing, Nio holds 62.7% of Shenji, outside investors 27.3%, and an employee incentive vehicle 10%. Shenji has raised nearly 3 billion yuan since its founding in June 2025.

Li Auto set up its chip corporate structure in July. Business registration records show Mach Intelligent Cores Limited was incorporated in Hong Kong on July 14. On August 4, Shanghai Mach Zhixin Intelligent Technology Co Ltd was established, wholly owned by the Hong Kong entity, with Li Auto CTO Xie Yan as legal representative. Days later, Mach Zhixin set up wholly owned Shanghai Mach Xin Technology Co Ltd, led by joint company secretary Wang Yang. A separate entity, Xinchuang Zhihe (Shanghai) Technology Co Ltd, was registered on July 13 with a chip-design business scope — LatePost did not clarify its relationship to the new structure.

An employee told LatePost that Li Auto's HR department has been negotiating adjusted employment contracts with chip division staff, indicating the roughly 200-person team is moving into the new entity. The group works on AI computing architecture, chip design and related software, and runs vehicle-side and cloud-side silicon programs in parallel.

The anchor product is the Mach M100, Li Auto's first mass-produced in-house chip. Built on a 5nm automotive-grade process, it delivers 1,280 TOPS per chip and is already fitted to several new or refreshed models launched this year. Xie, who heads Li Auto's systems and computing group, drove the M100 project. Since joining in 2022 he pushed for benchmarking the first chip against Nvidia's then-top offering and chose a dataflow architecture over mainstream GPGPU design.

The same dataflow approach underpins a cloud inference chip now in development, which could take over inference workloads currently running on GPUs. Industry insiders cited by LatePost call the approach technically feasible; the hard part is driving total inference cost down to a competitive level.

External capital would ease a real constraint. Li Auto posted a net loss of 3.98 billion yuan in the first half of the year, and extending from vehicle silicon to cloud chips demands sustained R&D spending. The wider funding environment helps: China's semiconductor sector absorbed about 162.7 billion yuan in financing in the first half, with AI computing a leading destination. Another reference point is Sunrise, spun off from SenseTime's large-chip division at end-2024, which has completed seven rounds in just over a year, raising roughly 4 billion yuan at a valuation above 10 billion yuan.

Retention is a second motive. LatePost previously reported departures including Jin Yihua, head of chip software development, and Dai Jie, head of front-end design team one, with core engineers drifting toward embodied-intelligence companies. In June, Li Auto granted 35 million share options to Xie, president Ma Donghui and CFO Li Tie — Xie received 10 million — exercisable in full only when the company's Hong Kong market value reaches HK$1 trillion.

Sales of the technology to third parties are also on the table. At a media briefing, Ma said chips and silicon carbide modules are small and versatile enough for other manufacturers to adopt, and in-house components that can be standardized can be sold externally. Battery packs are a different case: they are custom-developed around Li Auto's own vehicle requirements, and their capacity planning matches the automaker's own output, so they cannot be supplied externally, he said.

What to watch next: the closing date and final ticket size of the chip unit's first round, how much equity Li Auto cedes relative to Nio's 62.7% retention at Shenji, and whether the cloud inference chip hits cost targets that make external sales credible. ($1 = 6.7487 yuan)