DJI Automotive Attracts Investment Interest from BYD and FAW, Emerging as a Competitor to Huawei in China’s Smart Driving Sector.
DJI Automotive, the automotive division of Chinese drone manufacturer DJI, is poised to secure investments from BYD (OTCMKTS: BYDDF) and FAW Group, positioning itself as a formidable contender against Huawei in China’s smart driving landscape.
Reports indicate that both BYD and FAW have expressed investment intentions in DJI Automotive, and discussions are underway to advance the financing process, as disclosed by local media outlet 36kr.
In terms of valuation, DJI Automotive is seeking approximately 10 billion yuan ($1.4 billion) from potential investment institutions, according to the report. Concurrently, Huawei is divesting its automotive business unit and establishing a joint venture with Changan Automobile named Newcool, valued at over RMB 100 billion, as highlighted in the 36kr report.
Key players in the smart driving technology sector, such as Nio (NYSE: NIO), Xpeng (NYSE: XPEV), Li Auto (NASDAQ: LI), and Huawei-backed Aito, are aggressively advancing their developments, placing considerable pressure on traditional automotive companies.
For established car manufacturers facing limitations in independent R&D capabilities, the 36kr report suggests that Huawei’s automotive business and DJI Automotive emerge as viable options to consider.
Huawei has extended invitations to various car manufacturers, including Seres, Chery, Anhui Jianghuai Automobile Group, Beijing Automotive Group, Mercedes-Benz, Audi, and FAW, to invest in Newcool, according to the report. However, concerns have been raised among some companies about the high valuation and potential influence in the joint venture.
A source from a company already in partnership with Huawei’s automotive business mentioned preparing for due diligence on DJI Automotive, with FAW also reportedly engaged in talks about potential collaboration.
DJI Automotive’s overall valuation is estimated at around RMB 10 billion, with the possibility of adjustments based on negotiations leveraging existing order resources, notes the report.
Having become an independent entity in October 2022, DJI Automotive unveiled its next-generation smart driving solution on April 2, 2023. The solution facilitates L2+ assisted driving functions, including city pilot-assisted driving, without the reliance on high-precision maps or LiDARs, achieving this at a computing power as low as 32 Tops.
