# Xiaomi buys Sunwoda battery stake to cut reliance on CATL *The smartphone maker invested 1.7 billion yuan through Hanxing Venture Capital for a 5.34% stake in Sunwoda EVB, joining Li Auto as an anchor backer of the battery unit.* **Published:** November 2, 2026 **By:** Lian Chen **Section:** Batteries & Electric Vehicles — China **Format:** Company Watch **Confidence:** medium **Source:** https://eastasiabrief.com/batteries-ev/xiaomi-buys-sunwoda-battery-stake-cut-reliance-catl-1075 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - Xiaomi invests 1.7 billion yuan for a 5.34% stake in Sunwoda EVB - CATL held 45.37% of China battery installations versus Sunwoda at 2.89% - Sunwoda shareholder vote on the transaction convenes Nov. 20, 2026 ![Technicians and robotic arms assemble electric vehicle battery packs along an automated production line. (AI-generated image)](https://eastasiabrief.com/media/2026-11-02-bfb09736ed56.webp) *Technicians and robotic arms assemble electric vehicle battery packs along an automated production line. (AI-generated image)* Xiaomi formalized a 1.7 billion yuan ($255 million) equity investment on Nov. 2, 2026 to bring cell supplier Sunwoda into its electric vehicle supply chain, diluting its reliance on market leader CATL. The smartphone maker executed the deal through its wholly owned investment vehicle, Beijing Hanxing Venture Capital. The cash infusion secures a 5.34% equity stake in Sunwoda Electric Vehicle Battery, making Xiaomi its third-largest shareholder. The transaction values the power battery subsidiary at approximately 31.84 billion yuan ($4.78 billion). It subscribes to 897.8 million yuan of newly registered capital under an agreement signed following an executive board resolution, regulatory filings showed. The capital injection deepens a structural shift across Chinese automakers seeking secondary battery suppliers. CATL controlled 45.37% of China's domestic power battery installations through July, while Sunwoda held a 2.89% market share, according to industry association data. Xiaomi had relied almost exclusively on Contemporary Amperex Technology and BYD subsidiary FinDreams for early iterations of its SU7 sedan. Adding Sunwoda provides a dedicated manufacturing partner for higher-volume, cost-sensitive vehicle platforms entering production next year. Under the post-investment shareholding structure, parent company Sunwoda Electronic sees its controlling interest via Sunwoda Huizhou diluted from 24.06% to 22.78%. The founding group remains the single largest shareholder but loses majority voting control on the subsidiary board. Electric vehicle maker Li Auto ranks as the second-largest shareholder, with its equity stake diluted from 8.79% to 8.32%. Li Auto had injected 2.65 billion yuan into the battery unit earlier this year to anchor its own extended-range powertrain programs. Sunwoda Electronic will surrender its board majority at the battery subsidiary and deconsolidate the unit from its financial statements. The parent company preliminarily estimated that the derecognition will lift its 2026 annual net profit by 3.2 billion to 4.5 billion yuan. The Shenzhen-listed parent company simultaneously cancelled its planned secondary listing on the Hong Kong stock exchange. Management cited shifting capital market conditions and revised internal restructuring goals, according to a corporate statement submitted to the Shenzhen Stock Exchange. The equity tie-up operationalizes a joint development agreement signed between Xiaomi, CALB and Sunwoda in early September. That pact established technical cooperation for the proprietary Xiaomi Longjia battery system, which covers cell architecture, structural packaging and chemical formulations. Xiaomi has already deployed dedicated engineering and quality verification teams directly to Sunwoda manufacturing facilities. The automaker oversees six core operational modules on site, including process engineering, pilot line calibration, automated equipment maintenance and upstream cathode sourcing. Sunwoda EVB operates dedicated, customized assembly lines tailored specifically to Xiaomi specifications. The supplier will build specialized prismatic cells configured for extended-range electric vehicles, a segment where cost containment takes precedence over extreme energy density. The expansion comes as carmakers push back against supplier concentration in power electronics. Premium nickel-manganese-cobalt packs from tier-one producers account for nearly 40% of an electric vehicle's total bill of materials, limiting gross margin flexibility on lower-priced trims. Automakers refer to heavy reliance on tier-one suppliers as an operating margin penalty during periods of intense retail price competition. Securing equity in independent cell makers gives original equipment manufacturers visibility into raw material procurement contracts and conversion costs. CALB, which captured a 6.32% share of domestic battery installations this year, also supplies cells for the Longjia architecture. Splitting procurement volumes across two tier-two manufacturers gives Xiaomi commercial leverage when negotiating annual volume supply contracts. The procurement pivot replicates the supply chain playbook pioneered by domestic rival Li Auto. Li Auto replaced tier-one cells with Sunwoda packs across its refreshed L8 sport utility vehicle line, while ramping commercial trials of its internally developed Lianshan battery packs. CATL still maintains its technological lead in ultra-fast charging architectures and premium pack integrations. Xiaomi continues to procure high-nickel ternary packs from CATL for performance-focused editions, preserving high-discharge capability on its flagship electric vehicle variants. Korean battery suppliers LG Energy Solution, Samsung SDI and SK On face indirect pressure as Chinese automakers internalize domestic supply. Global automakers operating in China increasingly mirror this multi-sourcing strategy, reducing potential joint-venture cell contracts for foreign cell makers. Japanese equipment vendors and material processors also track the realignment as production tooling shifts to tier-two factories. Equipment suppliers that provide coating, winding and stacking machinery must now qualify their hardware across a broader roster of Chinese battery cell plants. The capital increase agreement signed between Hanxing Venture Capital and Sunwoda EVB remains subject to approval at an upcoming extraordinary general meeting of Sunwoda shareholders on Nov. 20, 2026. The regulatory filing does not state agreed minimum procurement quotas or contractual cell pricing schedules. Xiaomi has not published specific pack capacity figures or cell delivery timetables for its forthcoming sport utility models. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Xiaomi battery equity tie-up | LG Energy Solution and SK On face narrowing Chinese OEM supply opportunities | Sunwoda EVB valuation hits 31.8 billion yuan as CATL dominance faces multi-sourcing | Tooling vendors recalibrate equipment delivery schedules toward tier-two cell expansions | EV automakers lower pack bill-of-materials costs by anchoring equity in secondary suppliers | ## In this story - **Companies:** Xiaomi, Sunwoda Electronic - **Tickers:** 1810.HK, 300207.SZ - **Exposed:** CATL, Li Auto, CALB - **Impact:** Supply Chain, Capex, Cost Structure ## Primary sources 1. 36kr.com 2. qq.com 3. sina.com.cn 4. cninfo.com.cn 5. ifeng.com --- Cite as: East Asia Brief, "Xiaomi buys Sunwoda battery stake to cut reliance on CATL," November 2, 2026. https://eastasiabrief.com/batteries-ev/xiaomi-buys-sunwoda-battery-stake-cut-reliance-catl-1075