Xiaomi puts down $10bn stake to enter the electric vehicle market
Prolific Chinese technology firm Xiaomi might have first made its name in the smartphone business, but it didn’t take the company very long to begin exploring other electronic and hardware applications. Xiaomi has made everything from smart wearables to home appliances to electric scooters to even musical instruments, proving itself to be something of a Renaissance Brand in expanding its capacities and adding new product ranges.
It’s extensive product development portfolio is one of the main reasons that its major unveiling event of the year, Xiaomi’s Mega Launch, has to be split into two days. The first focused on its core handset business, but the second was more eclectic with new product announcements – including the reveal that Xiaomi is getting into the electric vehicle space.
The world’s third-largest smartphone maker behind Apple and Samsung, according to research firm Canalys, announced this week that it will invest an estimated US$10 billion over the next 10 years, starting with an initial investment of US$1.5 billion. Xiaomi will set up a wholly-owned subsidiary to run its electric vehicle business, with current CEO Lei Jun also serving as the chief of that subsidiary as well.
“The decision was made after numerous rounds of deliberation among all our partners, and this will be the final major entrepreneurial project of my life,” the chief executive was quoted in a statement.
As it gets its plans off the ground, Xiaomi will be entering a hotly-contested marketplace: besides Elon Musk’s Tesla, the BBC reports that there are literally hundreds of EV makers in China, competing for a slice of the world’s leading market for electric cars.
American entrants Tesla and Ford are both eyeing the massive Chinese market, while local tech giants like Baidu, Alibaba, and Didi Chuxing are all launching EV joint ventures to get their own divisions going. But Xiaomi will also be slugging it out with smartphone rivals Huawei and Apple in the crowded electric car market.
Apple has been pursuing its EV ambitions for some time now, and with the decline of its ailing smartphone and telecommunications interests, Huawei is supposedly in talks with state-owned automaker Changan Automobile and other companies to manufacture EVs. A report emerged that Xiaomi was in discussion to partner with Chinese automaker Great Wall Motor Co. for help in building electric cars – Xiaomi declined to comment on the report, while Great Wall said it had not held such talks with Xiaomi.