On September 4th, Sunwoda Electronic Co., Ltd. (SHE: 300207) announced that Li Auto (HKG: 02015) plans to invest 2.65 billion yuan in its subsidiary, Sunwoda Power, subscribing for 8.79% of its shares post-increase. Upon completion of the transaction, Li Auto's related entities will indirectly hold a combined 11.17% stake in Sunwoda Power, making it the company's second-largest shareholder.
Li Auto stated that this strategic investment in Sunwoda Power is not a purely financial move, but is fundamentally aimed at establishing a longer-term strategic synergy centered on battery technology, manufacturing quality, and user value. "This investment helps upgrade our collaboration from joint R&D and manufacturing coordination to a long-term community of shared interests," the company said. "Li Auto will continue to lead the product definition, performance targets, quality standards, and key technology development for our users, while Sunwoda Power will leverage its engineering, manufacturing, and supply chain capabilities to jointly promote the stable, high-quality mass production of Li Auto's battery technology."
This is not the first time the two companies have collaborated at the capital level. In 2022, a subsidiary of Li Auto invested 400 million yuan in a Pre-A round for Sunwoda Power's predecessor, Sunwoda Electric Vehicle Battery Co., Ltd., acquiring approximately 3.2% of its equity at the time. Since then, as Sunwoda Power continued to raise funds, Li Auto's stake has been diluted.
Beyond their shareholder relationship, the partnership has deepened. In 2025, Li Auto and Sunwoda Power jointly established Shandong Li Auto Battery Co., Ltd., with a registered capital of 300 million yuan and a 50-50 ownership split. This company focuses on battery manufacturing, sales, and new energy technology R&D, primarily undertaking the industrialization of Li Auto's self-developed batteries. Under this cooperation model, the division of labor assigns Li Auto responsibility for R&D and Sunwoda Power for manufacturing. Li Auto's Senior Vice President of EV R&D, Liu Liguo, and Senior Director of Power Batteries, Liu Zhimin, explained that Li Auto defines the product specifications for its self-developed batteries and leads the underlying development of cell material formulas, structural systems, battery packs, and battery management systems (BMS). In the manufacturing phase, they collaborate through the joint venture's operational framework and Sunwoda's mature manufacturing platform.
Even with the deepening partnership between Li Auto and Sunwoda, this does not signal a reduction in collaboration with CATL (SHE: 300750). In September 2025, Li Auto signed a five-year comprehensive strategic cooperation agreement with CATL, focusing on battery safety, ultra-fast charging technology, and business expansion both domestically and internationally. CATL stated its intention to supply power battery systems, including ternary lithium, M3P, lithium iron phosphate, and sodium-ion batteries, for Li Auto's entire product line.
Alongside its continued cooperation with CATL, Li Auto maintains a strategy of diversification in its battery sourcing. Liu Liguo has stated that Li Auto will not set fixed ratios for self-developed versus externally supplied batteries, but will instead evaluate options based on product competitiveness, safety, quality, cost, and delivery, without unconditionally committing to full capacity at its joint venture plants. Liu Zhimin also indicated that Li Auto's final product solutions will not rely solely on self-developed paths and will continue collaborations with leading industry suppliers. If self-developed products do not offer competitive comprehensive metrics, they will not be used in vehicles. During the Q2 2026 earnings call, Li Auto's management reiterated this approach, stating that the company has developed independent capabilities in cell system design, battery pack structure, thermal management, and BMS algorithms, planning to gradually apply its branded batteries to more models starting in the second half of 2026. Chairman Li Xiang also noted that self-developing batteries does not imply that supplier products are inferior, nor will it affect CATL's important position as a battery partner.
From an operational perspective, this investment in Sunwoda Power represents a further commitment by Li Auto to core battery technology and supply chain autonomy. On one hand, deeper capital ties facilitate joint R&D, manufacturing coordination, and capacity assurance between the two parties. On the other hand, diversification helps create a balance among cost, technology, and delivery, reducing reliance on a single supplier.
Additionally, on the Q2 earnings call, Li Auto mentioned that fluctuations in lithium carbonate prices are putting pressure on battery costs. Its mitigation strategies include locking in long-term purchase volumes, pursuing refined operations, and developing battery packs in tandem with vehicle architecture to find a better balance among energy consumption, thermal control, safety, space, and cost.
Industry observers believe that Li Auto's investment in Sunwoda Power holds significance beyond adding an equity stake; it completes the company's tripartite battery strategy, which involves "self-development, joint development, and external procurement." Li Auto also stated that this strategic investment will enhance its influence in battery technology, manufacturing quality, and long-term collaboration, support the high-quality implementation of non-standard battery solutions, and build a stronger foundation for next-generation product R&D and rapid iteration.