Autonomous tier1 places 361 million yuan "double bet" on the future

On August 27th, HUAYU Automotive Systems Co., Ltd. (referred to as "HUAYU Automotive") simultaneously announced two strategic acquisitions.

First, it is proposed to acquire 49% equity of SAIC Qingtao Energy Technology Co., Ltd. (referred to as "SAIC Qingtao") held by the company's controlling shareholder SAIC Group for 206 million yuan. Second, the wholly-owned subsidiary Shanghai Huizhong Automotive Manufacturing Co., Ltd. plans to acquire 5.2957% equity held by some shareholders of Lianchuang Automotive Electronics Co., Ltd. (referred to as "Lianchuang Electronics") for a price not exceeding 155 million yuan.

Image source: HUAYU Automotive

In the wave of transformation in the automotive industry, electrification and intelligence have become irreversible development trends. Among them, solid-state batteries and integrated intelligent chassis are regarded as core technologies defining the competitiveness of the next generation of automobiles.

It is reported that Huayu Automotive is closely following the trends in automotive technology development, accelerating business structure adjustments and layout around its medium- and long-term strategic development goals, and striving to cultivate new business growth points. So, can this strategic acquisition with a total transaction value of 361 million yuan help it transition from a traditional component giant and achieve a leap forward, especially in the context of domestic and international giants having already established technological barriers? What are the odds of success for this "bold gamble"?

Two transactions, are they really worth it?

The hidden and close ties between HUAYU Automotive, SAIC Qingtao, and Lianchuang Electronic all point to SAIC Motor Corporation.

SAIC Qingtao was established in 2023, jointly invested by SAIC Motor Corporation and Qingtao (Kunshan) Energy Development Group Co., Ltd., focusing on the research, development, and production of semi-solid and solid-state batteries.

Lianchuang Electronics was established in 2006 and is indirectly controlled by SAIC Motor Corporation through its wholly-owned subsidiaries, Shanghai Automotive Group Investment Management Co., Ltd. and Shanghai Automotive Group Equity Investment Co., Ltd. Its main products include automotive intelligent steering control systems, intelligent braking control systems, intelligent suspension control systems, central motion coordination controllers, and intelligent driving connectivity products.

Huayu Automotive is a listed platform under SAIC Motor Corporation that primarily focuses on the automotive parts business. Its predecessor was the part of SAIC Motor Corporation that independently supplied automotive parts.

Image source: SAIC Motor Corporation Limited

SAIC Qingtao was established relatively recently, and financial data shows it is still in the investment phase: in 2024, its operating income was 0, and net profit was -63.3467 million yuan; in the first half of 2025, its revenue was only 46,600 yuan, with a net loss of 40.6787 million yuan. Lianchuang Electronics' net profit attributable to shareholders was -152 million yuan in 2024, and it continued to incur a loss of 53.3998 million yuan in the first half of 2025.

Although both companies are currently operating at a loss, the valuation agencies have given them considerable valuations. SAIC Qingtao is valued at 420 million yuan, significantly higher than its book value, mainly due to its intangible assets such as patents related to solid-state batteries and software copyrights. Additionally, due to the strong market expectations for the growth potential of Lianchuang Electronics in the smart chassis sector, the valuation agency has used the income approach to value Lianchuang Electronics at 2.923 billion yuan.

According to the 2025 semi-annual report of HUAYU Automotive Systems, the company achieved an operating income of 84.7 billion yuan from January to June, representing a year-on-year increase of 9.55%. The net profit attributable to shareholders of the listed company was 2.883 billion yuan, reflecting a year-on-year growth of 0.72%. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 2.681 billion yuan, marking a year-on-year increase of 2.73%.

The total transaction value of 361 million yuan for these two acquisitions accounts for 12.5% of Huayu Automotive's net profit of 2.883 billion yuan in the first half of 2025. It is worth noting that achieving technological breakthroughs and market expansion in the fields of solid-state batteries and intelligent products will require long-term and continuous investment from Huayu Automotive.

In 2025, the new energy vehicle market has entered a new industrialization phase with the mass adoption of semi-solid state batteries. Recently, SAIC MG4 launched a semi-solid state battery version, with specific pricing to be announced in September and mass supply within the year. Other versions in the same series are priced up to 105,800 yuan. It is reported that the batteries for this version are supplied by SAIC Qingtao, with the electrolyte content reduced to 5%.

To provide stable and large-scale product delivery for the MG4, Qingtao has invested in the construction of automotive-grade mass production factories for semi-solid-state batteries and manganese-based composite cathode materials. Currently, Qingtao Energy has established solid-state battery production bases in multiple locations, including Wuhai in Inner Mongolia, Chengdu in Sichuan, Yichun in Jiangxi, Kunshan in Jiangsu, and Taizhou in Zhejiang. The current production capacity of solid-state batteries is 12GWh per year, with a total planned capacity of 55GWh per year. Additionally, a core materials production base has been established in Xuyi, Jiangsu, and a battery recycling base has been set up in Tongren, Guizhou.

With the rapid development of intelligent driving technology, the drive-by-wire chassis has become a key execution component for achieving high-level autonomous driving. Lianchuang Electronics' technological accumulation in areas such as intelligent steering and intelligent braking can form a strong complementary effect with Huayu Automotive's chassis business.

The next generation of technology becomes a key competitive point.

Behind the two strategic acquisitions by Huayu Automotive lies the restructuring of the underlying logic of the auto parts industry amidst the wave of industrial transformation.

In the era of traditional fuel vehicles, the core of competition for auto parts companies is large-scale production and cost control. By mass-producing core components such as engines, transmissions, and fuel systems, they capture market share with low cost and high efficiency.

As the global new energy wave accelerates, the automotive industry is shifting from "mechanical drive" to "electric + intelligent drive," and the survival logic of component companies is also changing accordingly.

As a result, the supply chain previously built around engines and transmissions is gradually becoming obsolete, replaced by a surge in demand for new energy-related components such as "batteries, electric motors, electronic controls, smart cockpits, and drive-by-wire chassis."

In the first half of this year, the penetration rate of new energy vehicles in our country surpassed 50% multiple times. Against the backdrop of accelerated evolution towards electrification and intelligence, the "technological positioning" of traditional component companies is particularly critical. In the next-generation technology of new energy vehicles, solid-state batteries and integrated chassis undoubtedly stand at the "center stage."

Solid-state batteries are considered an important direction for the next generation of power batteries due to their higher safety and energy density. According to the Gasgoo Auto Research Institute, the development of solid-state battery technology is accelerating, and several companies have already started trial production. It is expected to gradually achieve large-scale application between 2025 and 2030.

Image source: SAIC MG

At this year's Shanghai Auto Show, William Li, the founder of NIO, proposed the concept of the "new three components" of smart electric vehicles, which are the intelligent driving chip, the full-domain operating system, and the intelligent chassis.

In its 2025 interim report, Huayu Automotive also pointed out that with the gradual advancement of the national "dual carbon" strategy, the proportion of new energy vehicles continues to increase, and the trends of "intelligentization and electrification" in the automotive industry are becoming more apparent. The profound transformation of the automotive industry brings more opportunities and challenges for parts companies' future development. Parts companies must accurately grasp the trends of automotive industry transformation, accelerate product structure adjustments and technological innovation, expedite digital transformation and the construction of green manufacturing systems, and identify suitable paths for their own innovative transformation and green low-carbon development.

Huayu Automotive's dual-line investment this time has accurately grasped the two core trends of the automotive industry transformation. These two transactions also clearly convey Huayu Automotive's strategic intention to deeply transform towards "intelligence and electrification."

After the completion of the transaction, Huayu Automotive will hold a 49% stake in SAIC Qingtao. Huayu Automotive stated that this marks the company's first entry into the solid-state battery field, which is conducive to completing the product matrix of the "intelligent power" platform and achieving the synergistic development of the "solid-state battery" business with the "electric drive" and "thermal management" businesses.

After the equity acquisition is completed, SAIC Qingtao plans to change its name to Qingtao Power Technology (Shanghai) Co., Ltd. (subject to the final registration by the market supervision department). In the future, Huayu Automotive will utilize its existing management and customer resources to accelerate the establishment of its operational mechanisms, quality control systems, R&D capabilities, and production capacities. By leveraging the advantages of a "neutral" market expansion, it will further diversify its customer base and expedite the comprehensive implementation of its overall strategy for semi-solid and solid-state batteries.

For Lianchuang Electronics, Huayu values its technological synergy in the field of smart chassis. With Huayu Automotive's integration of the smart chassis business, the completion of this acquisition will facilitate Shanghai Huizhong in actively promoting cooperation and coordination with Lianchuang Electronics in areas such as smart chassis and intelligent connectivity. This will further enrich Shanghai Huizhong's smart chassis product portfolio, accelerate its business transformation and upgrading, and better promote Shanghai Huizhong's transition from a traditional chassis manufacturer to a smart chassis solutions provider.

Strategic layout, securing a position with technology.

Currently, focusing on the industry development trends of "intelligence and electrification," Huayu Automotive's "three major intelligent platforms" are further concentrating on major vehicle customers and key model projects, achieving good progress in business acquisition and technology enhancement.

In the field of intelligent cockpit platforms, Yanfeng Automotive Trim Systems Co., Ltd., based on the "upper body" product strategy, coordinates five major product resources, including interior trim, seats, passive safety, cockpit electronics, and exterior trim, to continuously promote integrated innovation and enhance the product capability of Yanfeng's intelligent cockpit. Some innovative products, such as zero-pressure seats, intelligent steering wheels, and ambient lighting, have recently been awarded key model supply contracts with major vehicle clients such as XPeng Motors, Geely Automobile, and Huawei's partners.

In the field of intelligent chassis platforms, Shanghai Huizhong Automotive Manufacturing Co., Ltd. aims to create an "integrated intelligent chassis integration platform." Using the development of intelligent chassis prototypes and joint key project R&D as opportunities, the company is accelerating the establishment of capabilities in chassis system integration, development, design, and verification. At the same time, it adopts various methods such as collaborative cooperation and vertical integration to gather advantageous resources from internal and external supply chains, forming an independently controllable chassis system industry chain.

Image Source: Shanghai Huizhong

In the field of intelligent power platforms, Huayu Automotive Electric Systems Co., Ltd. is focusing on the "large-scale single product + platform-based premium product" strategy, continuously optimizing design, technology, materials, and other aspects to enhance the product competitiveness of drive motors and core components. They have recently secured projects with SAIC General Motors, SAIC Volkswagen, Chery Automobile, and IM Motors, while actively exploring business opportunities with clients such as Volvo, Seres Automotive, Changan Automobile, and Geely Automobile.

Therefore, in the long run, these two acquisition decisions by Huayu Automotive are typical cases of traditional component companies responding to industry transformation: rapidly addressing technological shortcomings through capital operations and then realizing synergies by leveraging their existing business foundation.

According to reports, Huayu Automotive acquired a 49% stake in SAIC Qingtao based on the business development needs of the "intelligent power" segment; the acquisition of Lianchuang Electronics is aimed at accelerating the creation and forward-looking layout of the "intelligent chassis" business matrix.

In fact, the advantages of Huayu Automotive are self-evident: it has the capability to cover the full range of products, from automotive body structural components to automotive electronics, and from chassis systems to interior and exterior trims. Its products cover more than 60% of automotive component categories.

According to the 2025 semi-annual report, 63.7% of Huayu Automotive's main business revenue comes from vehicle clients outside of SAIC Group. Among them, BYD, Seres Automotive, Tesla Shanghai, Geely Auto, FAW-Volkswagen, Chery Automobile, Xiaomi Auto, Brilliance BMW, XPeng Motors, and Changan Ford have become its top ten domestic non-SAIC vehicle clients in terms of revenue share.

As of the end of June 2025, over 80% of the full lifecycle orders for newly acquired business by HUAYU Automotive Systems are related to new energy vehicle models, and more than 60% are for domestic independent brands.

By 2025, the wave of new energy has shifted from a trend to a reality, and the transformation of auto parts companies is no longer optional but a matter of survival. Although the path of transformation is full of challenges, only by proactively embracing change can they break through and be reborn in the new energy wave, upgrading from "traditional parts suppliers" to "core participants in the new energy era."

With the completion of two transactions, Huayu Automotive's strategic layout in the intelligent electric vehicle sector is becoming clearer, laying a solid foundation for it to seize a favorable position in the automotive industry transformation.

In the future, Huayu Automotive plans to leverage its existing management and customer resources to accelerate the research, development, and commercialization of solid-state battery and smart chassis technology. By utilizing the advantages of the "neutral" market, it aims to further diversify its customer structure and expedite the comprehensive implementation of its overall strategic layout. Additionally, using the listed company as a platform will facilitate external collaboration and the promotion of its technology to other vehicle manufacturers.

Conclusion:Overall, the two strategic acquisitions by Huayu Automotive allow it to quickly fill its technological gaps and achieve synergies by leveraging its existing business foundation. However, how to coordinate related party transactions with its controlling shareholder SAIC Group and maintain a market-oriented operational mechanism are also focal points for external observers. In the future, whether these strategic layouts can truly transform into competitive advantages and profitability will require market validation.