Business
The push consists of Li Auto’s exclusive Mach chips, silicon carbide modules made by Sike Semiconductor, and variety extenders. The Mach chip and silicon carbide module organizations have actually currently been put in different business entities as they look for more outside consumers. Sike is likewise preparing to raise external capital.
Li Auto has actually likewise signified that other powertrain innovations, including its variety extender system, are offered to external clients. Its internal battery service, nevertheless, has no such prepare for now.
“Batteries are extremely tailored, that makes external supply too tough,” a market source stated.
In July, Li Auto signed up Xinchuang Zhihe, an entirely owned business in Shanghai, for its Mach chip company, an action towards separating the system and getting ready for external sales.
According to 36KrLi Auto’s senior management has actually likewise authorized the spinoff of the chip organization, while it is pursuing consumers in parallel. A source stated a number of embodied intelligence business have actually held talks with Li Auto executives, who clearly pitched the Mach chip to them.
Whether those business eventually embrace the Mach chip might depend upon how tough it is to port their algorithms.
The Mach M100 is Li Auto’s very first motorist support chip readily available for mass production. Each chip provides 1,280 tera operations per 2nd (TOPS) of calculating power and memory bandwidth of 273 gigabytes per second. Li Auto has formerly stated the Mach M100 offers 3 times the functional computing power of Nvidia’s Thor-U.
Considering that the 2nd quarter, the Mach M100 has actually been set up in the brand-new Li L9, Li L8, Li Mega, and the brand-new Li i9. An individual at Li Auto stated mass production has actually gone reasonably efficiently for the business’s very first exclusive chip, with Li Auto booking considerable production capability at chip fabrication plants.
Sike Semiconductor approached external supply even previously. The silicon carbide business started running individually at the start of this year, taking duty for its own earnings and loss while looking for consumers outside Li Auto.
Spinning off exclusive innovations and providing them to outside clients is not uncommon in the automobile market. Business frequently do so to share advancement expenses and reach more consumers.
With gross margins under pressure, Li Auto looks for outdoors financing
Li Auto is not except money on its balance sheet. At the end of the 2nd quarter of 2026, it still had RMB 87.5 billion (USD 13.1 billion) in money reserves, the greatest amongst China’s more recent electrical automobile makers.
However, Li Auto deals with 3 needs on its money: a sales healing that stays delicate, depressed gross margins, and considerable R&D costs.
Li Auto provided 261,600 automobiles from January through August 2026, down 0.6% year-on-year. Sales just started to recuperate slowly after August, as the Li L6, brand-new Li Mega, Li i8, and Li i9 pertained to market in succession.
Because 2023, Li Auto had actually been the most lucrative amongst China’s more recent electrical lorry brand names. In the very first half of 2026, as its item lineup went through a shift, the business published a net loss of RMB 3.994 billion (USD 595.7 million), compared with an earnings of RMB 1.743 billion (USD 260 million) a year previously.
Its gross margin likewise was up to 9.4% from 19.4%, well listed below the 15– 20% variety that CEO Li Xiang has actually formerly referred to as healthy.
Even as sales and revenues stay under pressure, Li Auto is increasing investing to maintain its longer-term competitiveness. The 2nd quarter of 2026 marked the 6th successive quarter in which its R&D costs were around RMB 3 billion (USD 447.4 million), while quarterly operating capital had actually only simply gone back to favorable area.
Those pressures assist describe why Li Auto is looking for more income and capital from outside the business.
Nio has actually taken a comparable course. It tape-recorded a bottom line of RMB 22.4 billion (USD 3.3 billion) in 2024, the biggest in its history. That very same year, it started opening its battery swap network to third-party car manufacturers and energy business.
In 2025, Nio spun its exclusive chip organization into an independent subsidiary, GeniTech. Nio CEO William Li openly stated the business wanted to open it to the market.
GeniTech consequently stepped up talks with car manufacturers and robotics business and formed a joint endeavor with Axera Semiconductor. In February this year, it finished its very first financing round, raising RMB 2.257 billion (USD 336.6 million) at a post-money assessment of around RMB 10 billion (USD 1.5 billion).
Nio’s chip spinoff is not the only one making development. According to 36KrHuixi Technology, a chip business that as soon as went through extreme operating problems, has actually likewise protected successive financing rounds amidst the embodied intelligence boom, with its assessment increasing quickly.
Li Auto’s Mach chip, on the other hand, utilizes a dataflow architecture developed around expert system work. It, too, is trying to find brand-new chances.
Exists a market for Li Auto’s innovation?
The variety extender was among the parts Li Auto started establishing internal fairly early. By 2026, Li Auto had actually presented its third-generation variety extender and was both establishing and producing the part itself.
Openly offered info shows that Li Auto’s newest range-extender system, based upon its exclusive third-generation variety extender and platform, accomplishes fuel usage of 6.3 liters per 100 kilometers. It likewise utilizes a new-generation motor established and produced internal, providing power-generation effectiveness of 94.8% and extending the upkeep period to 3 years.
A market source informed 36Kr that Li Auto might be wanting to provide variety extenders externally due to the fact that it prepared considerable production capability early on, and external sales would assist make fuller usage of that production capability.
Tradition high-end brand names now looking for to change their organizations in China might end up being clients.
Silicon carbide semiconductors are another innovation that Li Auto relocated to establish internal early.
In 2022, Li Auto and Sanan Semiconductor collectively developed Sike Semiconductor. Under the department of obligations, Li Auto leads module style and car combination, Sanan provides silicon carbide chips and substrates, and Sike Semiconductor’s factory in Suzhou manages product packaging and screening.
A market source informed 36Kr that Li Auto’s silicon carbide modules take advantage of being created around a car manufacturer’s combination requirements.
“Li Auto’s technique isn’t just to accumulate semiconductor specs,” the source stated. “It has to do with making the module smaller sized to maximize area inside the lorry and making performance enhancements equate straight into real-world variety. To put it simply, Li Auto comprehends what type of parts car manufacturers in fact require much better than providers do.”
Technological benefits do not instantly equate into sales to 3rd celebrations. One barrier is Li Auto’s identity as a car manufacturer itself.
To get rid of the trust barrier that includes that identity, Li Auto is attempting to loosen up Sike’s ties to the moms and dad business and turn it into an authentic third-party provider.
Li Auto owns 70% of Sike Semiconductor. An individual near to Sike informed 36Kr that given that its facility, the business had actually reported to Li Auto’s production department. In February this year, Sike ended up being operationally independent, and its management group started reporting to Sike’s board rather.
“Sike and Li Auto utilized to be part of the exact same system. Now Sike has actually finished the separation,” an individual knowledgeable about the matter informed 36Kr
Sike Semiconductor is likewise looking for external funding and has actually started preparations for an IPO. Its instructions is clear: generate external capital rapidly and widen its ownership, resolving other car manufacturers’ issues about purchasing from a rival.
Li Auto’s Mach chip company is following a comparable course.
Completely owned Xinchuang Zhihe has an authorized service scope that consists of incorporated circuit chip style and associated services, along with sales of chips and associated items. Its legal agent is Wang Yang.
According to 36KrWang signed up with Li Auto in 2020 and works as its joint business secretary, having actually long been accountable for matters associated with capital markets.
A number of market sources informed 36Kr that providing Li Auto’s chips externally ought to not be especially hard, in part since a variety of embodied AI business established by previous Li Auto staff members are prospective clients with existing ties to the business.
Far, 5 embodied AI business have actually emerged from Li Auto alumni: previous Li Auto AI chief researcher Chen Wei established Zigleap AI; previous Li Auto CTO Wang Kai established Simplexity Robotics; previous head of wise driving Lang Xianpeng took part in establishing Kunlunx AI; previous co-CTO Xia Zhongpu signed up with Anyverse Dynamics as a co-founder; and previous director of smart driving items Zhao Zhelun took part in establishing Vita Dynamics.
Li Auto’s exclusive Mach M100 chip was developed particularly for vision-language-action designs and on-device structure designs, a technical technique comparable to what robotics business are now utilizing. That might make it simpler to adjust than chips from Nvidia and other suppliers, a benefit that might interest start-ups.
KrASIA functions equated and adjusted material that was initially released by 36Kr. This post was composed by Xu Caiyu for 36Kr.
Keep in mind: RMB figures are transformed to USD at rates of RMB 6.70=USD 1 based upon quotes since September 21, 2026, unless otherwise specified. USD conversions are approximate and, where suitable, rounded for ease of referral. They might not completely match dominating currency exchange rate.
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