Megvii Leads New AI Push in Automotive
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As iconic Chinese automotive brands such as Ideal and Great Wall announce their transformations into AI-focused enterprises, the reverse trend is also observable: several AI companies are now actively seeking collaborations with automotive manufacturers.
Just two months ago, the co-founder and CEO of Megvii Technology, Yin Qi, took on the position of chairman at Lifan Technology (601777.SH). This strategic maneuver, where an AI company is gaining control of a publicly listed automotive firm, marks a new chapter in the quest for innovation in the transportation sectorWhile Lifan has been under the leadership of Geely, it is now gearing up for a significant shift, driven by the ambitions of both companies to mesh AI with the automotive industry.
Recent insider reports suggest that in efforts to better adapt to his new role, Yin Qi has relocated his family from Beijing to Chongqing
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This move is significant, especially since Geely has not fully relinquished its stake in Lifan Technology, indicating that the two companies will operate in a system of shared responsibilities moving forward.
AI Companies Entering the Automotive Arena
The news of Megvii’s interest in Lifan Technology began circulating about half a year agoIn July 2024, it was reported that Yin Qi proposed to acquire a portion of shares from Geely's subsidiaries for 2.43 billion yuanBy August 2024, Lifan Technology confirmed that the necessary stock transfer processes had been completed.
Following the completion of this equity transaction, Yin Qi now indirectly holds 19.91% of Lifan Technology, marking him as the second-largest shareholderMeanwhile, Geely, along with Chongqing's Liangjiang Industrial Group, together controls 29.85% through the Chongqing Manjianghong Equity Investment Fund, making it the largest stakeholder.
According to sources, this shift means Yin Qi has effectively taken the helm at Lifan Technology
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The backdrop to this change lies in the aspirations of the Chongqing municipal government to enhance Lifan's status, aiming to elevate it as a “second Series of exceptional automobiles.”
Megvii Technology, founded in 2011, blossomed from the visionary ideas of alumni from Tsinghua University’s Computer Science program—Yin Qi, Tang Wenbin, and Yang Mu—all of whom were mentored by the renowned Turing Award winner Andrew Yao.
Insiders reveal that Megvii has drafted plans on how to steer Lifan Technology going forwardThe initial ideas include leveraging AI technology in vehicle manufacturing and potentially developing Robotaxi services under the Lifan brand, with anticipated revelations around the first half of 2025.
Ma Jihua, founder of Darui Consulting and an analyst in the telecommunications sector, commented on the situation, noting that automotive intelligence is a significant trend and that AI capabilities are swiftly emerging as central competitive factors in the automotive business
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He further emphasizes that for AI companies, automotive business could represent a considerable growth avenue, demanding collaboration with manufacturing firms to secure stable market positions.
Megvii's proud history includes the public showcasing of its in-vehicle AI visual solutions in 2018, featuring functionalities like digital face recognition and driver identificationBy 2021, they launched their intelligent driving brand, Maiqi Zhixing, concentrating on L2+ driving assistance systemsThe company unveiled several production configurations for L2+ level autonomous driving in 2023 and is currently working on next-generation, end-to-end systems that connect perception, decision-making, and control.
Megvii has positioned itself to create affordable high-level driving solutions aimed at mainstream vehicles, coinciding with Lifan's electric vehicle brand, Ruilan, which also targets the mass market, specifically within the price range of 50,000 to 150,000 RMB.
Prior to this development, there were collaboration efforts between Megvii and Geely surrounding autonomous driving solutions based on the Hezhizhe Intelligent A1000 chip, with reports in April 2024 stating that Megvii was advancing an intelligent driving scheme for a Geely vehicle
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By July 2024, a strategic partnership was established among Geely, the Liangjiang New Area of Chongqing, and Megvii, intending to build an open AI intelligent driving platform that would integrate AI with automotive and robotic innovation.
An Indirect Path to IPO
With Yin Qi at the helm of Lifan Technology, it effectively transforms Megvii’s aspirations of going public into a plausible realityRecords indicate that from 2011 to 2020, Megvii competed in 10 funding rounds, raising over 1.935 billion dollars, but its IPO journey has been riddled with setbacks.
In 2019, Megvii submitted an IPO application to the Hong Kong Stock Exchange; however, various factors interrupted this pursuit, resulting in no progressIn 2021, the company redirected its IPO ambitions to the Shanghai Stock Exchange’s Sci-Tech Innovation Board, aiming to raise approximately 6.018 billion yuan for research and development projects
Although this application received acknowledgment in March 2021, it remained stagnant in registration.
By November 2024, Megvii opted to withdraw its IPO applicationThis stalling of the IPO process hindered Megvii from initiating new equity financing rounds while exposing the company to mounting financial pressuresTheir prospectus revealed a total loss of 4.137 billion yuan as of June 2021; details about the company’s financial performance from 2022 to 2024 remain unknown due to updates not being made available.
Yin Qi's leadership now enables Lifan Technology to enhance its operational effectiveness, aligning it with Megvii's strategic vision for the automotive sector, which is essential for Megvii given its current financial status.
Lifan Technology’s origins can be traced back to Lifan Co., founded by Yin Ming Shan, known as the “Motorcycle King” of Chongqing
By 2010, it emerged as the first private passenger vehicle company to be listed on the A-share marketHowever, a combination of uncompetitive vehicle designs and increasing domestic market competition led Lifan Coto struggle with dwindling sales and mounting debts.
In 2020, Lifan underwent a judicial restructuring, resulting in its largest shareholder, the Manjianghong Fund, which holds nearly 30% of the companyManjianghong Enterprise Management, the management team of the fund, became the actual controller, backed primarily by Chongqing Liangjiang Fund and Geely.
Post Geely's entry as a major stakeholder, Lifan Corebranded itself to Lifan Technology and shifted focus towards the electric vehicle segment through establishing the Ruilan Automobile joint venture and offering customized vehicles for Geely's ride-hailing service.
Reportedly, in 2024, Lifan Technology produced 37,150 vehicles, representing a year-on-year increase of 20.62%. Sales totaled 59,094 units, up 39.77%, while electric vehicle sales accounted for 25,842, reflecting a 5.17% increase.
Despite these increases, Lifan Technology's profitability presents concerns
Their financial report highlights revenues of 4.814 billion yuan in the first three quarters of 2024, marking a modest 11.19% growth, yet net profits plummeted by 35.34% to approximately 39.94 million yuan.
In September 2024, Geely Holdings released the "Taizhou Declaration," outlining their commitment to optimizing internal resource integration, clarifying brand positioning, assessing ownership structures, and minimizing conflict of interest as well as redundant investments to enhance resource efficiency.
Given this context, Lifan Technology remains an asset Geely must potentially refine, but insiders assert that Geely has not abandoned Lifan, affirming that the automotive manufacturing aspect will continue to be under Geely's guidance.
Challenges of Integration: Hardware and Software
Today’s automotive landscape continues to evolve, fueled by the integration of AI technologies
As smart driving and intelligent cockpit designs gain prominence, the synergy between automotive and AI companies is becoming increasingly crucial.
During the recent 2025 CES event, both international and domestic car manufacturers demonstrated their commitment to AI technologies, showcasing advancements made in smart driving, intelligent cabins, and interactive platforms, notably featuring companies like BMW, Honda, Hyundai, Geely, and Great Wall.
For several years, Megvii Technology has adhered to a strategy of integrating both software and hardware, setting it apart from many other AI companiesThe company now self-develops multiple types of mobile robotic products including AMR robots, SLAM navigation forklifts, AI stackers, and shuttles, while also incorporating a variety of third-party hardware to provide solutions for smart warehouse applications.
Megvii’s focus on hardware, including robotics, is intentional
In 2023, Yin Qi predicted that AI would evolve into two main streams: AI in the digital world, exemplified by ChatGPT's innovations, and AI in the physical realm, with firms like Tesla integrating AI into hardware, producing automated vehicles and robotics that transform the physical landscape.
According to sources, Megvii is not only focused on enhancing driving intelligence through AI but is also considering empowering Lifan Technology's robotics capabilities with their AI technologies.
Investor and AI expert Guo Tao highlighted that in manufacturing, including AI robotics, technology can optimize production processes, enhance efficiency and quality control, and enable smart manufacturing, significantly reducing downtime through predictive maintenance.
However, skepticism regarding Megvii's capabilities in AI technology still lingers
Having been a leader in computer vision during the first stage of AI, the landscape has since shifted dramatically into the era of AI 2.0, where large models dominate, leaving Megvii at risk of being overshadowed by emerging AI firms that garner significant investment.
Chen Jia, an independent international strategic researcher, indicated that for AI to thrive in foundational production settings like smart assembly, companies will need to develop differentiated strategiesThe real challenge lies in modifying generic large AI models to meet the unique needs of China’s automotive and supply chain industryWhile domestic large model players are making promising strides, there remains a considerable gap when compared to the flagship products from OpenAI and Google.
As for Megvii's positioning in the large model sector, it remains somewhat obscure, with its Taiyi large model only recently passing registration requirements laid out in the “Interim Measures for the Management of Generative Artificial Intelligence Services.” However, early indicators suggest that Megvii began developing large model technologies years ago, albeit without much public visibility.