Chinese state-owned carmaker Guangzhou Automobile Group (GAC) is investing a combined $104.8 million in the country’s IPO-bound autonomous driving startup Pony.ai and auto parts manufacturer Chenzhi Technology.
GAC’s board of directors agreed to invest up to 550 million yuan ($77.8 million) in Chenzhi Technology for a 30% stake in the company, which specialises in the development of smart wire control chassis for intelligent vehicles, showed a stock exchange filing by the auto group on Friday.
The planned investment in Chenzhi, at a valuation of over 1.8 billion yuan ($254.7 million), will make GAC its first external investor since the firm’s inception in November 2022.
Chenzhi, a wholly-owned subsidiary of another state-owned carmaker, Changan Automobile, is said to have invested 5 billion yuan ($707.6 million) in the development of its smart chassis from three R&D centres across the Chinese cities of Chongqing, Shanghai, and Chengdu, according to Changan Automobile’s president Zhao Fei.
The same stock exchange filing also shows that GAC’s board gave the green light to an investment of $27 million in Pony.ai, which counts Japan’s Toyota Motor Corp and Chinese electric vehicle (EV) maker Nio’s investment arm Nio Capital among its backers.
Pony.ai registered with the China Securities Regulatory Commission (CSRC) this April for an IPO in the US. It plans to issue up to 98.15 million ordinary shares on either Nasdaq or the New York Stock Exchange (NYSE).
Pony.ai’s latest fundraising saw the company secure $100 million from Saudi Arabian smart city developer Neom in October 2023. Its post-money valuation remains undisclosed.
Founded in 2016 and based in the US and China, the autonomous driving firm was valued at $8.5 billion following its Series D round in March 2022.
The firm counts carmakers including GAC, Toyota, SAIC Group, Sany Heavy Industry, and FAW Group among its partners.
GAC is one of the top five Chinese carmakers, with over 2.5 million vehicles sold last year. Its latest financial report shows that the group booked 129.7 billion yuan ($18.4 billion) in consolidated business revenue, up 17.6% year-on-year (YoY).