Xiaomi Plans 1.7 Billion Yuan Investment for 5.34% Stake in Sunwoda Battery Unit
Key Facts
Xiaomi plans to invest 1.7 billion yuan for a 5.34% stake in Sunwoda EVB, the electric-vehicle battery unit of Sunwoda Electronic, becoming its third-largest shareholder, CnEVPost reported, citing an announcement on October 29, 2026. The parties signed a capital increase agreement, but completion of the deal remains subject to approval by Sunwoda shareholders. Xiaomi will make the investment through its wholly owned subsidiary Hanxing Venture Capital by subscribing for newly issued capital. The deal directly links the company to an existing battery supplier, and Sunwoda said the investment would strengthen its unit’s financial position. It added that cooperation would focus on research and development, production capacity support and market expansion.
The deal’s significance goes beyond the entry of a new shareholder. Sunwoda’s stake in the unit will fall from 24.06% to 22.78% after the capital increase, while it remains the largest shareholder. But a reconstitution of the board will limit the parent company’s representation to half the seats or fewer, TechNode reported. As a result, Sunwoda will cease to control the battery business and to include its results in its consolidated financial statements. The change means separating the unit’s results from the parent company’s consolidated accounts, despite Sunwoda retaining the largest stake. Sunwoda initially estimated that removing the unit from its consolidated statements would increase its 2026 net profit by between 3.2 billion and 4.5 billion yuan, subject to a final audit.
The change comes as the results of the parent company and the unit diverge. Sunwoda’s revenue rose 45.78% year on year to 63.46 billion yuan in the first three quarters of 2026, while net profit attributable to shareholders fell 56.37% to 613 million yuan. The company attributed profit pressure to weak demand in consumer electronics and higher material costs, as well as the impact of the yuan’s appreciation and tax changes. Sunwoda EVB, meanwhile, recorded revenue of 15.53 billion yuan and a net loss of 324 million yuan in the first half of 2026. Those results put the deal’s estimated accounting impact in the context of a unit that continues to post losses despite its revenue scale.
The deal builds on an existing supply and partnership relationship between Xiaomi and Sunwoda EVB. The companies announced a strategic partnership on September 4, 2026, and Dragon Armour batteries they developed together are used in Xiaomi’s Sky Nomad series. On the same day, Li Auto announced plans to invest 2.65 billion yuan for a direct 8.79% stake in the battery unit. After Xiaomi’s investment, Li Auto’s stake is expected to fall to 8.32%, leaving it the second-largest shareholder, according to CnEVPost. That would make Xiaomi the third automaker to enter the unit’s ownership structure, after Sunwoda and Li Auto, based on the expected shareholder rankings following the capital increase.
In the market, Sunwoda shares closed down 4% in Shenzhen on October 30, 2026. In U.S. trading, Xiaomi’s stock, listed under the ticker XIACY, closed at $16.49 on October 29, according to EL7 data. Sunwoda said the cancellation of its plan to list in Hong Kong would not materially affect its operations or continued development. It added that the decision to end the plan followed a review of market conditions, changes at the company and its plans. The immediate next step for the deal remains a vote by Sunwoda shareholders, with no date specified in the announced information.