U Power [You Pao Ke Ji], a privately held Chinese electric vehicle (EV) maker, is seeking domestic and foreign investors to bolster its R&D capabilities and production, two sources familiar with the situation said. 

The Shenzhen-headquartered company hopes to raise around CNY 300m-CNY 500m (USD 42.97m-USD 71.61m) via a minority stake sale, both sources said. It wants to close a deal over the next few months, the first source noted. 

Preferred investors would be EV and auto parts makers and lithium-ion battery companies from China, the US and Europe, as well as artificial intelligence (AI) solutions providers, and USD- or CNY-denominated private equity funds with portfolios in the EV and technology sectors, the first source said. 

The company’s internal team is looking for suitable investors. Approaches from interested investors and advisors representing the buy-side would be entertained, the first source added. 

The company will use the proceeds from the investor introductions to bolster the R&D and production of smart EV chassis in China, the two sources said. 

Founded in 2021, U Power specializes in the development and production of EVs and smart EV chassis for passenger and commercial vehicles such as sedans, trucks, vans and MPVs, according to the company’s website. 

Its major business partners include Bosch, NVIDIA, and Horizon Robotics, the second source said. The company’s smart EV chassis is expected to go into mass production in 2023. It plans to forge a global business over the next few years, entering Europe and the US, the two sources said. 

The company’s management team mainly consists of auto experts from China and the US, the first source said. It runs three R&D centers in Shanghai, Chongqing and Silicon Valley, and recently set up branches in Hefei and Liuzhou. 

The company raised CNY 160m by taking on Hefei Industry Investment as a strategic investor in 1H22, with a post-money valuation of CNY 2.7bn, both sources said. 

It brought in Bosch as an investor in a Series A round in October 2021. Before that it took on Matrix Partners and Beijing Zhenge Tiancheng Investment Management as investors in a pre-Series A round, as reported. 

The company has yet to generate revenue. It is controlled by the management, both sources said. 

U Power and Hefei Industry Investment declined to comment.