Li Auto Puts 1bn Yuan Into $243m Chip Unit Funding Round

Li Auto has committed 1bn yuan of a 1.625bn yuan ($242.86m) equity financing round at its chip and domain controller subsidiary, Shanghai Mahe Xin Technology (MHX Technology), the Chinese automaker announced.

The parent, which is listed on Nasdaq, will inject its 1bn yuan through a wholly owned subsidiary. External backers supply the remaining 625m yuan. They include Hangzhou Jingtao, Lanchi Ventures, Huaye Tiancheng, and MiraclePlus.

Hangzhou Jingtao has also secured a one-off right to invest up to 500m yuan more on or before 31 December 2026. Any follow-on capital will be priced at the same terms per unit of increased registered capital as the current subscription — a fixed-price option, in effect.

Who holds what after the round?

Li Auto keeps majority control and will continue to consolidate the subsidiary's accounts. The ownership math depends on two variables: the employee share schemes and whether Hangzhou Jingtao exercises its 500m yuan right.

If both the incentive schemes and the investment right are fully taken up:

• Li Auto holds roughly 74.01% of MHX Technology
• The external investor consortium holds 6.58%
• Entities running the employee share schemes hold 19.41%

MHX Technology will introduce two share incentive schemes alongside the fundraising. Li Auto framed them as tools to reward and retain staff and key contributors — a standard retention play when a unit takes outside money for the first time.

Why spin the chip business out?

Li Auto set up the standalone unit to pursue broader industrial opportunities beyond automotive applications and to gain economies of scale. In plain terms: the chip and domain controller operation can now sell to non-automotive customers and raise capital without tapping the listed parent's balance sheet.

Proceeds from the financing will fund research, development, and commercialisation. The transaction remains subject to standard closing conditions, so the money hasn't moved yet — this is an announced deal, not a completed one.

What does this change for Li Auto?

Not much at the group level, financially. Li Auto consolidates the subsidiary either way, and a 74% floor on ownership means the chip business stays firmly in-house strategically. What changes is optionality: 625m yuan of fresh external cash, plus a potential 500m yuan more, funds silicon development without diluting the automaker's own shareholders directly.

For suppliers and competitors, it signals that a top Chinese EV maker intends to scale its own domain controller and chip volume beyond its vehicle programs — a nod toward third-party sales in a market where in-house silicon has so far mostly served the parent OEM.

The wider expansion picture

The chip funding sits alongside an aggressive overseas push. Li Auto recently unveiled its European business strategy and premiered the European Li 6 at the Paris Motor Show. The Li 6, the company's first model for Europe, launches and begins deliveries in the Netherlands and Norway in the first quarter of 2027, with local sales, delivery, aftersales, and service systems to follow and gradual expansion into more European markets planned.

In April, the company signed distribution partnerships in the Middle East. Al Fahim Motors will distribute in the UAE, where Li Auto plans to launch its extended-range L-series passenger vehicles this year. Mohamed Yousuf Naghi Motors will handle Saudi Arabia, also for L-series models.

What to watch next: whether Hangzhou Jingtao exercises its 500m yuan right before the 31 December 2026 deadline, whether the deal clears its closing conditions, and whether MHX Technology names its first non-automotive customer.