Li Auto Opens Its Chip Business to Outside Capital With $2.5 Billion Valuation

Li Auto has formalized the first outside investment in its Mach semiconductor division, a move that turns an in-house silicon effort into a partly independent business. The automaker disclosed signed agreements for a 1.625 billion yuan (about $242 million) round in Shanghai Mahe Xin Technology, the entity housing its chip work. Li Auto itself is putting in 1 billion yuan through a wholly owned subsidiary, with outside backers supplying the remaining 625 million yuan.

The investor group is led by Hangzhou Jingtao, Lanchi Ventures and Huaye Tiancheng, with MiraclePlus also taking part. Hangzhou Jingtao and funds tied to it hold an extra subscription right worth up to 500 million yuan, exercisable once on or before December 31, 2026 at the same per-unit price as the initial round. Should that option be taken in full, total investment climbs to 2.125 billion yuan and the post-money valuation reaches 17.1 billion yuan, roughly $2.5 billion. Li Auto noted that closing remains subject to customary conditions.

Control stays firmly with the parent. Li Auto will keep consolidating the unit’s results, and two equity incentive plans are being set up for employees and key contributors. If both plans are fully used and the additional subscription right is exercised entirely, Li Auto would hold about 74.01%, outside investors 6.58% and the incentive vehicles 19.41%.

The proceeds are earmarked for chip development and commercialization. Beyond powering Li Auto’s own vehicles, Mahe Xin intends to sell to outside customers and strike partnerships, leaning on a portfolio that spans chips, domain controllers and operating systems. Pushing into non-automotive applications is meant to build economies of scale that fund further research. Management has framed chips and domain controllers as a potential second growth engine next to the car business, while keeping synergies across chip, AI model and vehicle development. President Ma Donghui said in September that chips and silicon carbide modules are compact and adaptable enough to be standardized for external sale.

The centerpiece product is the Mach M100, a 5-nanometer automotive-grade driver-assistance chip rated at 1,280 TOPS that debuted in May and already ships in the company’s newest production vehicles. Li Auto calls it the world’s first dynamic dataflow AI chip and says it is pursuing full-stack on-device AI by co-designing algorithms, compilers, operating systems and silicon. A paper on the architecture was accepted for the industry track of ISCA 2026, which the company says is an industry first. Li Auto is also reportedly exploring a cloud inference chip built on dataflow architecture, which could carry the business from cars into data centers. The structure mirrors Nio’s approach: its GeniTech chip subsidiary closed a 2.257 billion yuan first round in February, leaving Nio with 62.7%. Xpeng, meanwhile, already supplies its own driver-assistance chip for Volkswagen vehicles in China but has not announced separate financing for that operation.