CHJ Electric Vehicles

wattEV2buy explores the CHJ Automotive electric car strategy and list the CHJ EV models, news, and sales as it vies for a position in the fast-growing EV market.

Co-founded by Kevin Shen and Li Xiang (Autohome and NextEV) the CHJ Automotive electric car strategy is the develop an ultra-compact EV for city use priced below $8,000. The initial launch date was set for March 2018. Central to the design of the smart lookalike EV is CHJ Auto’s battery swapping technology which opens up an annuity income stream for the company from the sale of its vehicles. The CHJ SEV is equipped with not one but two batteries. CHJ Auto is also planning a pure electric SUV and a range-extended version of it, using similar technology as the BMW i3 REx.

CHJ Auto is also one of Baidu, the Chinese equivalent of Google, vehicle manufacturing partners for its self-driving car program – Project Apollo. CHJ Auto and Chinese raid-hailing company, Didi Chuxing, entered into a JV to develop and build EVs in March 2018.

Founded in 2015, CHJ Automotive raised its starting capital in an Angel round from Future Capital. CHJ raised a further ¥780 million in 2016 through a round A fundraising from the lead investor the LEO Group, a machinery maker listed on the Shenzhen exchange and Source Code Capital, Changzhou Wujin Hongtu Venture Capital and Future Capital. In 2018 CHJ raised ¥3 billion in a round B fundraising led by Matrix Partners China, a new EV fund managed by the Shougang Fund, the investment vehicle for state-owned steel company Shougang Group bringing the total investment in the CHJ to nearly $1 billion (¥5.75 billion).

CHJ Plug-in Hybrid Electric Models

CHJ Concept EV Models

CHJ Electric Car Strategy in the news

2020 Week 31 NASD:LI - a stock to keep your eye on

In my Week 29 Top 5 EV newsletter, I reported that CHJ Automotive (“Leading Ideal”) filed a prospectus to raise a $100 million on the NASDAQ. The company floated its shares on the 30th of July under the stock code “Li” at $11.5, which saw it raise over $1 billion. The price closed up 43.13% on the day at $16.46, giving it a market cap of $13.917 billion, slightly lower than its compatriot, NIO’s US$14.42 billion market value.

The company proved that it could efficiently apply its funding, bringing its first model to market with as little as 1 billion US dollars. To date, the company has raised over two billion dollars and will use the current injection to develop its L4 autonomous driving platform, strategic expansion, and the development of new models.

Leading Ideal is one of the success stories in the current EV start-up environment. The company has already sold over 10,000 units of its large range-extended SUV, the Ideal One, which was launched in December 2019. In contrast to NIO, Leading Ideal has already achieved a positive gross profit margin while holding a large cash reserve.

Previously company founder and CEO Li Xiang disclosed that 50% of the capital of Ideal Auto is invested in research and development, 30% in the plant, and less than 20% in personnel and marketing.

In Q1 2020 Leading Ideal already achieved a gross profit of 68.288 million yuan, which it expects to double in Q2 2020. The Q1 gross profit margin is 8.01%. Li Xiangzeng set a goal for the company of being cash flow positive within five years, and not be depended on external funding for its growth. He further targets a 20% share of China’s new energy vehicle market by 2025 and be a leader in autonomous driving. In 2019 Leading Ideal developed its own operating system, called Li-OS.

The company plans to bring a second large SUV to market in 2022 and further plans to develop mid and high-end SUVs priced between 150,000 and 500,000 yuan. Like Tesla, Leading Ideal has also adopted a direct sales model and had 700 sales and service personnel 21 retail stores, 18 distribution centers, and 17 service centers throughout China, enough to support a sales target of 100,000 vehicles.

2020 Week 29 CHJ Leading files IPO prospectus in the USA

CHJ Automotive's EV brand, Leading Ideal Motors, submitted a prospectus to the United States SEC for an IPO on the NASDAQ. The Chinese EV startup is targeting to raise $100 million and have the stock code “LI.” The funds raised will be mainly used for new product development, capital expenditure, including production equipment, and working capital.

CHJ Leading Ideal Motors revealed that it plans to launch a full-size SUV in 2022, which will be equipped with a new-generation range-extending system. The CHJ Leading Ideal One SUV surprised the market with a successful launch, already selling over 10,000 units. According to the prospectus, the company sold 2869 vehicles in Q1 in 2020, generating 850 million yuan, which equaled a gross profit of 68.3 million yuan (8% profit margin).

The financial information in the prospectus shows that the startup showed a net loss of US$344 million in 2019 and US$10.89 million for Q1 2020. Leading Ideal holds cash and cash equivalents of US$149 million. The shareholding structure is divided into two classes of shareholding, Class A shares, and Class B shares. Class A shares correspond to 1 vote, and Class B shares correspond to 10 votes. Class A shares cannot be converted into Class B shares, and Class B shares can be converted into Class A shares. Currently, CEO and founder Li Xiang is the largest shareholder, holding 115,812,080 Class A shares, 240,000,000 Class B shares, 25.1% of the shares, and 70.3% of the voting rights. Wang Xing and Meituan hold 332,664,073 shares Class A shares hold 23.5% of the shares and have 9.3% of the voting rights.

Week 13 2018 CHJ Leading on track for 2019 release

CHJ Automotive announced that it will open 13 retail stores for its new luxury EV brand called Leading Auto. The first vehicle from this stable, the Leading One is on track for delivery later this year. CHJ acquired Lifan Motors earlier for an amount of 650 million yuan, and in the process secured Lifan’s production qualification, allowing it to start producing EVs. The thirteen cities where CHJ Leading will open retail shops are Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chengdu, Chongqing, Suzhou, Hangzhou, Nanjing, Zhengzhou, Xi’an, and Wuhan.

The co-founder of CHJ Li Xiang shared images of the plant where its range extended Leading One with a range of 1,000km (620miles) is produced indicating to his followers that the company is determined to bring the first car to market late 2019.

Week 48 2018 CHJ enters into production agreement with Lifan

The new brand by CHJ Auto “LEADING IDEAL” entered into an agreement with the Chinese OEM Lifan to assemble its first EV, the Leading Ideal One range extended SUV at a new plant in Changzhou, Jiangsu Province. The new plant will with a production capacity of 150,000 electric vehicles is to be completed by August 2019 and comes at a cost of ¥182million and covers 490,000m². The plant will produce only 5,000 units of the Leading Ideal One in 2019 and ramp up to 100,000 in 2020.

Week 35 2018 CHJ invest in assembly plant

CHJ Automotive and the Chongqing Liangjiang authorities entered into an agreement which allows CHJ to establish a smart EV assembly plant on an area covering 1.2 square kilometers. Construction of the plant will be completed by 2021 and have a capacity of 400,000. CHJ will invest RMB10 billion to establish its plant in Chongqing. CHJ is said to unveil its first highway-capable electric SUV later the year and plans to bring it to market in 2019. The Chinese EV start-up also plans to utilize its SEV neighborhood electric vehicle in ride-hailing programs in San Francisco and Paris.

Week 13 2018 SEV project canned

In 2017 CHJ Automotive of China announced with great confidence on CNBC the development of its SEV (small electric vehicle) priced below $8,000 to revolutionalize the EV sector. The landscape is moving fast and incentives and competition which made such a project viable at the time has changed. Since 2017 EV subsidies in China are more focused on long-range technology making the CHJ SEV business case obsolete. Competitors such as the SAIC-GM Wuling also brought the Baojun E100 to market for less than $5,000 after incentives. Other companies followed suit, and more companies such as ZhiDou have sub $5,000 EVs in the market. Subsequently, the Li Xiang, co-founder of CHJ and NextEV this week announced that the company would scrap the SEV project and focus on its collaboration with ride-hailing company Didi with which it is to develop a clever EV and the development of CHJ’s SUV EV.

Week 25 2017 New EV Brands announced

CHJ Automotive announced during a Round A capital raising that it will create a new vehicle category for city application by bringing an ultra-compact two-seat EV to market in 2018 from its plant in Changzhou, Jiangsu province.


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