Li Auto Inc. (Nasdaq: LI; HKEX: 2015), a leader in China’s new energy vehicle market, announced on October 16, 2026 that its subsidiary Shanghai Mahe Xin Technology Co., Ltd. has entered into subscription agreements for equity financing totaling RMB1.625 billion. The subsidiary, known as MHX Technology, is dedicated to the Company’s chip and domain controller business. The financing is designed to accelerate research, development, and commercialization while expanding the subsidiary’s reach into broader industrial opportunities.
Financing Structure
Under the agreements, Li Auto will invest RMB1.0 billion through a wholly owned subsidiary, while external investors will contribute RMB625 million to the financing. The external investor group includes Hangzhou Jingtao, Lanchi Ventures, Huaye Tiancheng, and MiraclePlus. This structure combines strategic corporate backing with independent capital from investors that bring experience in technology, manufacturing, and industrial growth.
Hangzhou Jingtao Subscription Right
Hangzhou Jingtao Additional Investor has also received a one-off right to invest in MHX Technology at the same price per unit of increased registered capital as that under the Subscription. This right may be exercised on or before December 31, 2026, for an aggregate consideration of not more than RMB500 million. The provision offers additional funding flexibility and reflects confidence among the investors in the subsidiary’s long-term technology prospects.
Strategic Rationale
The establishment of MHX Technology as a dedicated platform for the chip and domain controller business positions it to capture broader industrial opportunities, particularly in non-automotive sectors. The structure is intended to realize enhanced economies of scale beyond Li Auto’s core automotive operations, supporting more efficient production and development. It also creates a focused entity that can move more quickly on technology development and external partnerships across multiple markets.
Use of Proceeds and Talent Incentives
The Subscription provides MHX Technology with substantial capital to advance its research and development activities and speed up commercialization efforts. In connection with the financing, the subsidiary will adopt two share incentive plans to motivate its valuable employees and key contributors. These plans are intended to attract, motivate, and retain key talents while aligning participants’ interests with the long-term growth of the business.
Ownership Structure and Control
Assuming full utilization of both incentive plans and full exercise of the Hangzhou Jingtao Subscription Right, Li Auto, the Investors, and certain entities administering the share incentive plans expect to hold approximately 74.01%, 6.58%, and 19.41% equity interest respectively. Li Auto will continue to control and consolidate MHX Technology’s financial results following the financing. This ensures that the subsidiary remains closely integrated with the Company’s broader strategic direction and operational priorities.
Closing Conditions and Next Steps
Completion of the financing remains subject to customary closing conditions, including any regulatory and corporate approvals that may be required. Further details are available in the Company’s announcement published on the website of The Stock Exchange of Hong Kong Limited on October 16, 2026. The transaction is expected to support the subsidiary’s ability to scale its chip and domain controller offerings across current and future markets.
By securing this equity financing, Li Auto is reinforcing its commitment to advanced chip and domain controller development while maintaining control of a strategically important subsidiary. The participation of external investors and the introduction of employee incentive plans align stakeholders around long-term growth, innovation, and value creation. The move highlights Li Auto’s broader ambition to extend its technology footprint beyond automotive applications and into new industrial markets.