(Yicai) Sept. 7 -- Li Auto plans to invest CNY2.7 billion (USD402.3 million) in electric vehicle battery maker Sunwoda EVB to lift its stake and become its second-largest shareholder, deepening ties in battery research and development, manufacturing, and quality management.

The injection will correspond to an 8.8 percent stake in Sunwoda EVB after the capital increase is completed, parent firm Sunwoda Electronic announced late on Sept. 4. After the transaction, Li Auto-related entities will indirectly hold a combined 11.2 percent stake in the unit, it added.

Li Auto and Sunwoda first joined hands in 2017, with the carmaker gradually becoming one of Sunwoda’s major customers. In 2022, a Li Auto subsidiary injected CNY400 million (USD59.6 million) in Sunwoda EVB’s pre-A fundraiser and took a 3.2 percent stake.

The latest investment aims to boost Li Auto’s impact in the partnership, ensuring better guarantees for quality, delivery, and next-generation R&D, the Beijing-based firm noted.

Last October, Li Auto and Sunwoda set up the 50:50 joint venture Shandong Li Auto Power Battery.

Li Auto is pursuing a self-development battery route, starting with forming an in-house R&D team in 2015 and installing its self-developed 5C battery in vehicles this year, with Sunwoda serving as the contract manufacturer.

Shares of Sunwoda Electronic [SHE: 300207] rose 2.3 percent to CNY17.23 (USD2.57) each as of 10.35 a.m. in Shenzhen today. Li Auto’s stock [HKG: 2015] jumped 3.2 percent to HKD49.34 (USD6.30) in Hong Kong.

Editor: Martin Kadiev