(Yicai Global) Feb. 14 -- Shares of Luxshare Precision Industry rose after the Apple assembler said it invested CNY10.1 billion (USD1.6 billion) in Chery Holding Group, becoming the Chinese carmaker’s fourth-largest shareholder and marking its first foray into the new energy vehicle field.

After earlier soaring as much as 6.5 percent, Luxshare [SHE: 002475] ended 2.1 percent higher today at CNY41.90 (USD6.29).

Luxshare bought 19.9 percent of Chery Holding, 7.9 percent of Chery Automobile, and 6.2 percent of Chery New Energy Automotive from Wudaokou New Energy Automobile Industry Fund Enterprise, the Dongguan-based smartphone assembly giant said in a statement on Feb. 11.

According to the agreement Luxshare signed with Chery Holding, the pair will set up a NEV joint venture to design, develop, mass produce, and export core auto parts and components for Luxshare, helping the company to become a leading tier-one car parts supplier.

The move gives Luxshare a chance to become part of Apple’s auto supply chain as the US tech giant has not yet decided which foundries will supply its automotive business, said Lin Zhi, chief analyst at marketing intelligence firm Wit Display.

Mobile phone foundries are looking for new opportunities because the handset market is saturated, and almost all Apple assemblers are in the electric vehicle business, Lin said.

Still, Luxshare’s foray into the auto sector is a bit late as the investment threshold is rising, an industry insider said. NEV startups Nio and Xpeng Motors lost CNY1.9 billion (USD299 million) and CNY3.6 billion, respectively, in the first three quarters of last year.

Following the deal, Wudaokou’s stake in Chery Holding dropped to 26.9 percent from 46.8 percent, becoming the firm’s second-largest shareholder after the state-owned assets manager of Wuhu city in Anhui province.

Editor: Futura Costaglione