Xiaomi motors into EV with new business unit

Rising Chinese technology star Xiaomi has now officially entered the automotive business after it completed the business registration of Xiaomi EV with registered capital of 10 billion yuan (US$1.55 billion).

Xiaomi described the move as a milestone in its push into the smart electric vehicle (EV) market and said the new initiative "has officially entered a substantial development phase."

The much anticipated initiative has been five months in the making. Xiaomi reiterated its intention to initially invest RMB10 billion into the new unit. Over the next ten years, the company has pledged to plow a total of $10 billion into the EV business.

Figure 1: Drive on: Xiaomi is officially in the EV game.
(Source: Denys Nevozhai on Unsplash)

After the presentation of its second-quarter results for 2021, the smartphone specialist also announced its intention to buy DeepMotion, an autonomous driving tech startup, for around $77.4 million.

Xiaomi CEO Lei Jun has taken on the roles of CEO and legal representative of Xiaomi EV. He has previously said that the creation of this new business area is one of the most important decisions ever made by the company, and that he is willing to "put all my personal reputation on the line" to make the "Xiaomi electric vehicle" a success.

Xiaomi EV already has a team of 300 employees, and it plans to recruit "more like-minded talented individuals."

Xiaomi said it has since conducted more than 2,000 interview surveys and visited over ten industry peers and partners. However, it has revealed few details of its strategy for the automotive sector or vehicle types it intends to launch.

Earlier in August, Reuters reported that Xiaomi had entered talks with beleaguered real estate giant Evergrande to buy a stake in the latter's automotive unit.

The news agency said Xiaomi responded to the news by writing on its official Weibo account that it is in touch with several automakers but has yet to decide on a partner.

Car rivals?

Xiaomi is joining peers including Apple and Huawei Technologies, which are also betting on more cars becoming battery-powered and smart.

Huawei has denied reports it plans to build its own smart car and reiterated that its aim is to adapt its ICT technologies to smart cars in collaboration with the industry.

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Apple has been the gossip of the car industry as it seeks an auto partner to support a possible Apple Car.

However, the smartphone maker must overcome the fear of car manufacturers that they could become the "Foxconn of the auto industry" if they sign up with Apple. Foxconn is the Taiwan-based company that makes half the world's iPhones in a factory in northeast China.

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— Anne Morris, contributing editor, special to Light Reading