The deal deepens the Chinese and South Korean automakers' alliance beyond vehicle development into autonomous driving, software-defined vehicles, robotics and semiconductors as they prepare the SE-10 SUV for 2027.
Chery Automobile has agreed to invest $75 million, or about 110 billion won, in South Korea's KG Mobility through three-year convertible bonds that would give China's largest car exporter an approximately 10% stake if fully converted into common shares. KG Mobility said the investment is meant to reinforce cooperation between the two companies and will not lead to Chery's participation in management. The agreement lifts a partnership that began more than two years ago from product cooperation to a capital alliance. After signing a strategic partnership and a license agreement for Chery's T2X platform in October 2024, and then agreeing in April last year to jointly develop mid-to-large SUVs, the companies are now broadening their work into future mobility technologies and overseas business expansion. Their first joint development project, the SE-10, is a D+ segment SUV positioned as carrying on the Rexton heritage. The model is being developed for a January 2027 launch in plug-in hybrid and 2.0-liter gasoline versions. KG Mobility CEO Hwang Ki-young said the vehicle uses Chery's T2X platform but has been fully redesigned inside and out, with KG Mobility applying its SUV expertise to improve driving and engine performance. The companies said they are also pursuing a second joint vehicle project for major markets including South Korea, China and Europe, with product plans intended to reflect regional regulations, safety standards and customer demand from the outset. Industry observers have suggested that effort could include extended-range electric vehicles and compact SUVs. Beyond vehicles, the partners plan to cooperate on autonomous driving, software-defined vehicle electrical and electronic architecture, and development of Level 3 or higher autonomous vehicles beyond advanced driver assistance systems. They will also review joint research, demonstration and commercialization in robotics, semiconductors, raw materials and steel, with sector-specific task forces involving senior management. Executives from both companies framed the investment as a way to share rising research and development costs as electrification and software competition intensify, while using each side's manufacturing footprint, supply chains and sales networks to expand globally and navigate differing tariff environments. Chery sold about 2.8 million vehicles globally last year, including roughly 1.34 million exports, while KG Mobility sold about 55,000 vehicles in the first half of this year, with exports accounting for about 60% of total sales.