Physix Frontier
With 1.625 Billion Yuan in Funding, Li Auto's Chip Business Wants to Move Beyond Its Own Cars
Li Auto plans to take its self-developed chips beyond its own vehicles and build a business serving more customers. On October 16, its subsidiary Shanghai Mahexin Technology signed a first-round 1.625 billion yuan funding agreement, bringing in external capital for its chip and domain controller business.
The key takeaway from this funding round is that Li Auto is starting to prepare capital, organizational structure, and customer resources for an external-facing chip business.
▎ Li Auto Puts In 1 Billion Yuan, External Shareholders Put In 625 Million Yuan
Let's break down the 1.625 billion yuan: Li Auto subscribed 1 billion yuan through a wholly-owned subsidiary, while external investors subscribed 625 million yuan. Among them, Hangzhou Jingtao, an investor under BlueRun Ventures, and Huaye Tiancheng each contributed 200 million yuan, while MiraclePlus contributed 25 million yuan.
Li Auto put up the lion's share itself, so why give away part of the equity to others? The arrangement in the announcement is quite specific: beyond injecting capital, the company also hopes institutional investors will help it reach potential customers, suppliers, and partners.
Li Auto will remain the controlling shareholder, and Mahexin's financial results will still be consolidated into the group's statements. The new shareholders' participation in funding is also expected to help expand the business. For a company preparing to sell technology externally, finding customers is just as important as continuing R&D.
▎ The M100 Is Already on the Road; the Next Step Is Getting Others to Buy It Too
Li Auto already has a product foundation from internal use. According to its Q2 earnings announcement, the new L8 that began deliveries in June this year has the Ultra version equipped with one self-developed M100 chip and the Livis version with two; the new L6 delivered in July also uses the M100.
Now, Li Auto intends to make the market bigger than its own vehicle models. The funding announcement explicitly states that Mahexin aims to seize broader industry opportunities, especially in non-automotive sectors.
To that end, Mahexin, newly established in August this year, will serve as a dedicated platform for the chip and domain controller business, concentrating capital and management resources. The funding will also be used for acquiring assets to be transferred in, R&D, procurement, and business expansion, and the plan also includes two equity incentive programs.
This step changes the questions the chip team has to face. When used internally, the product revolves around Li Auto's vehicle models and software development; when facing external customers, it also has to adapt to other people's products, tools, and development rhythms.
Put yourself in the buyer's position: how much time would it take to switch to this chipset, and can follow-up supply and software support keep up? A chip that runs well in Li Auto's cars is the foundation for winning customers; getting other teams to use it well is what creates the opportunity for repeat purchases.
▎ The Valuation Is Set; Revenue Depends on Customers Paying
This round carries an agreed post-investment valuation of approximately 16.63 billion yuan, according to the incentive plan