Luxshare Precision Industry Co., a supplier and contract manufacturer for Apple Inc., signed an agreement with Chery Automobile Co. this week to jointly develop and produce electrified vehicles.
The deal will allow Luxshare to become a major tier-one supplier to the auto industry in three to five years, the Shenzhen-listed company said.
Under the agreement, Luxshare Precision will spend 10.1 billion yuan ($1.6 billion) to acquire 7.87 percent of Chery Automobile, 19.88 percent of its parent company, Chery Holding Group Co., and a 6.24 percent stake in an electrified-vehicle subsidiary, Chery New Energy Vehicle Co.
As part of the deal, a 1.7-billion-yuan joint venture with Chery New Energy Vehicle will be created to develop and produce electrified vehicles.
Luxshare Precision, based in Dongguan, Guangdong province, produces cables, connectors, motors, wireless charges, antennas, and acoustic and electronic modules for a broad range of industries such as consumer electronics, communications, automobiles and health care.
The company started to supply electronic components to Apple in 2011. It is one of Apple’s biggest contract manufacturers for products such as AirPods, the Apple Watch and iPhone.
Chery, based in Wuhu, Anhui province, delivered 865,352 cars and light trucks in 2021, a 37-percent increase, according to the China Passenger Car Association. The tally includes 95,625 full electric vehicles, a 122 percent jump.
Its parent, Chery Holding, also operates a joint venture with Jaguar Land Rover that builds vehicles under the Jaguar and Land Rover brands.