Xiaomi to pay 1.7 billion CNY for 5.34% of Sunwoda EVB, set to end Sunwoda's control

Xiaomi (HKG: 1810) plans to invest 1.7 billion CNY (c. $253 million) in Sunwoda Electric Vehicle Battery, the EV battery unit of Sunwoda (SZSE: 300207), for a 5.34% stake. Sunwoda's board approved the deal on October 28, 2026, and the company disclosed it the following evening. The deal still needs approval from Sunwoda's shareholders.

The money comes through Hanxing Venture Capital, a wholly owned investment arm of Xiaomi. It buys 897,805,204 CNY of new registered capital, lifting the unit's registered capital to about 16.81 billion CNY from 15.91 billion CNY.

The bigger change is who controls the unit. Sunwoda's holding, held through Sunwoda Huizhou New Energy, would be diluted to 22.78% from 24.06%. After a board election, Sunwoda would hold no more than half of the seats, so Sunwoda EVB would stop being a subsidiary and leave the parent's consolidated accounts.

The filing says the price is consistent with the unit's previous C round. It cites that round's pre-money value of 25 billion CNY and the capital added since, and the parties agreed on 30.13 billion CNY (c. $4.49 billion) for the unit before the new money. That puts the post-money value at about 31.83 billion CNY, by our calculation.

Xiaomi would become the third-largest shareholder, behind Sunwoda and Li Auto (NASDAQ: LI). Sunwoda disclosed on September 4 that Li Auto planned to invest 2.65 billion CNY (c. $395 million) for a direct stake of 8.79%, which would be diluted to 8.32%. Sungrow (SZSE: 300274) would fall to 4.12% from 4.35%, and an XPeng investment vehicle in Guangzhou holds 0.21%.

The rest of the register is long. The filing lists 98 shareholders before the deal, including state funds, bank investment arms, Tianqi Lithium's Shehong unit at 0.47% after dilution, and a fund linked to SAIC at 0.42%.

Three carmakers would hold stakes in Sunwoda EVB, with Xiaomi entering as the third-largest shareholder; Li Auto is shown at its direct stake (chart based on Sunwoda filing)

For Sunwoda, giving up control brings an accounting gain. The company expects the change to add 3.2 billion to 4.5 billion CNY (c. $477 million to $670 million) to its 2026 net profit, because the remaining stake is remeasured at fair value on the day control passes. The final figure is subject to audit.

After the change, Sunwoda will book only its share of the unit's earnings as investment income instead of consolidating its full accounts. The company said the move lets it focus on consumer batteries and energy storage, while cutting its overall financing needs and its liability ratio.

The gain lands in a weak year. Sunwoda's third-quarter revenue rose 52.78% to 25.28 billion CNY (c. $3.77 billion), but net profit attributable to shareholders fell 98.08% to 10.57 million CNY (c. $1.57 million). For the first nine months, revenue rose 45.78% to 63.46 billion CNY and net profit fell 56.37% to 613 million CNY (c. $91 million).

Sunwoda blamed the drop on industry conditions, exchange losses and changes to export tax rebates and consumption tax. On the same evening, it also dropped its plan for a Hong Kong H-share listing, which its board and shareholders had approved in July 2025, citing market conditions and its development plans. Sunwoda shares closed down 4% in Shenzhen on October 30.

The battery unit itself is still losing money. Sunwoda EVB had revenue of 20.09 billion CNY (c. $2.99 billion) in 2025 and a net loss of 3.17 billion CNY (c. $472 million). In the first half of 2026, revenue was 15.53 billion CNY and the loss narrowed to 324 million CNY (c. $48 million).

Its balance sheet explains why outside money matters. At June 30, the unit had total assets of 68.15 billion CNY and liabilities of 57.24 billion CNY, a liability ratio of about 84%, by our calculation. Sunwoda said the new capital will lower that ratio and reduce the unit's debt burden.

Xiaomi fits its Dragon Armour battery, built with Sunwoda EVB and CALB, as standard across the SkyNomad series (Xiaomi)

For Xiaomi, the stake follows a supply deal already in place. On September 4, Xiaomi launched its Dragon Armour battery with CALB and Sunwoda EVB. Sunwoda EVB set up a dedicated production line for it, with Xiaomi quality staff stationed on site, and the battery is standard across the SkyNomad series.

Xiaomi backed the launch with a lifetime guarantee, offered free to the first non-commercial owner of each car: if a factory battery catches fire on its own because of a quality fault and the car is written off, Xiaomi will replace it with a new car of the same specification. A second guarantee covers fires caused by collisions or underbody scrapes.

Xiaomi needs the supply. It delivered 40,015 cars in September, its best month of 2026, and 286,490 in the first nine months, against a full-year target of 550,000. That leaves 263,510 deliveries for the last three months of the year, or about 87,837 a month.

Sunwoda said the deal will deepen cooperation in research, production capacity and market expansion between the two companies. It still needs approval from Sunwoda's shareholders, and the board election that would end Sunwoda's control will follow the capital increase.

With Li Auto, Xiaomi and an XPeng vehicle all on the register, Sunwoda EVB is turning into a supplier partly owned by its customers. The next test is whether that ownership brings the unit enough orders to turn its first-half loss into a profit.

Conversion rate: 1 USD = 6.7138 CNY as of October 30, 2026.