KH Automotive Technologies, a supplier of air suspension systems for passenger cars, announced on November 14 its completion of round-B financing totaling 510 million yuan ($72 million), jointly led by China Venture Capital, CRRC Guochuang, Source Code Capital and Shenzhen Capital Group. Other participating institutions included Yonghua Capital, Huoyan Capital, Shanshan Venture Capital and Dening Capital.
KH Automotive Technologies completed a pre-A round of financing led by Legend Star in February 2021 and round-A financing exclusively from Xiaomi‘s investment fund in September 2021.
Electronic air suspension is comprised of system structure assembly, air springs, air units, controllers, sensors and other key sub-components. KH Automotive Technologies mainly provides assembly system development, air springs and controllers.
Electronic air suspension also has high technical barriers. First of all, it involves the cross-cutting research of many basic disciplines, including dynamic mechanics, materials science and so on. Secondly, it requires the manufacturer to have strong design abilities and to understand the dynamic mechanics of the whole vehicle. Thirdly, the whole R&D process needs the producer to cooperate with original equipment manufacturers. KH Automotive Technologies has deep accumulation in ECS system electronic control algorithms, system matching integration, air spring verification, chassis adjustment, and more.
After more than two years of research and development, KH Automotive Technologies successfully developed an air suspension system for Voyah, a Chinese electric vehicle maker, in June 2021, ending the absence of passenger car air suspension systems suppliers in China. In January 2022, the 10,000th set of air suspension systems by KH Automotive Technologies was delivered.
KH Automotive Technologies is currently the exclusive supplier of air suspension systems or air spring assembly for Li Auto‘s L9, and Voyah’s Free and Dreamer models. The company’s cumulative supply reached 60,000 sets by mid-November. Next year, the company will provide products for another seven new models.
KH Automotive Technologies has more than 400 employees and R&D institutes in Shanghai, Huzhou and Changchun. It has an annual production capacity of 150,000 sets. After setting up a new base of 100,000 square meters in July 2022, it can accommodate an annual production capacity of 2 million sets.
According to Xu Yidong, the vice president of KH Automotive Technologies, the penetration rate of electronic air suspension in the Chinese automotive industry in 2021 is about 1% and 2%, and the market space is about 1 billion to 2 billion yuan. By 2025, the penetration rate is expected to reach 15%-20% for a total market space of 30 billion to 40 billion yuan.