Changan Automobile signs up four strategic investors for NEV subsidiary

Shanghai (Gasgoo)- Chongqing Changan Automobile Co., Ltd (Changan Automobile) announced on December 3 its agreement of introducing four strategic investors for its wholly-owned NEV arm, Chongqing Changan New Energy Automobile Co., Ltd (Changan New Energy), and giving up the pre-emption right in this transaction.

On the same day, the signing ceremony for welcoming the new shareholders was held at Changan New Energy.

The four new investors are set to inject a combined capital of RMB2.84 billion into the NEV subsidiary, of which RMB103,228,179 will be pumped as part of registered capital, said Changan Automobile. After the deal is closed, the registered capital of Changan New Energy should be increased to RMB202 million from RMB99 million.

Besides, the subsidiary will no longer be wholly held by Changan Automobile, whose equity stake will be diluted to 48.9546%.

The four new strategic investors—three are from Chongqing, where Changan Automobile is headquartered, and one is located in Nanjing—are all supported by state-owned assets controlled by corresponding local governments, according to relevant local reports.

Changan Automobile said the NEV has become a field of strategic importance in which both domestic and foreign OEMs are striving for. Due to the fierce competition, it will be increasingly difficult for Changan to develop NEV business with its standalone efforts. Thus, introducing external resources and diversifying equity structure are necessary to vitalize the NEV arm's development, enhance operational efficiency, and accelerate the integration of the resources along the NEV industrial chain.

Changan New Energy plans to plow RMB10 billion in total over the next three year in building a NEV platform and promoting the integration of NEV and auto intelligence technologies. Currently, it has established in U.S. a technical innovation hub that focuses on cutting-edged technologies of power battery, motor controller, electric motor and auto intelligence. Meanwhile, a UK-based R&D center has also been launched to develop core technologies of hydrogen fuel cell battery system integration (Photo source: Changan Automobile).