It was not long ago that rumors pointed towards Xiaomi producing electric cars targeted at the “mass market.” The company was reported to integrate them with other products. It was said that the phone maker will manufacture Electronic Vehicles (EVs) at a plant from the Chinese auto giant Great Wall. Now, the company has gone ahead and confirmed the development.
Breaking news: Xiaomi entering Smart Electric Vehicle business🚗🚙 pic.twitter.com/ftWGITI8X7
— Agatha Tang (@aggasaurus) March 30, 2021
Xiaomi has announced its plans to invest about $10 billion over the next decade to manufacture electric cars. It is said to be the biggest-ever overhaul to enter China’s booming EV market. Lei Jun, the co-founder of the company will lead a new, standalone division. This division will invest an initial 10 billion yuan ($1.5 billion) on smart vehicle manufacturing.
EV sales in China is said to climb more than 50% this year alone, says a research from Canalys. This will be an effect of consumers embracing cleaner automobiles and costs tumbling.
According to Bloomberg, Xiaomi could invest a total 100 billion yuan on the project over the next three years. This includes external financing, a person familiar with the matter said before the announcement. Xiaomi is said to contribute about 60% of the envisioned sum and plans to raise the rest of the funds.
The Chinese company will be joining the likes of Apple, which is also rumored to be working on an EV. It will pile into a space where an array of automakers including Tesla are building EVs for the future. As per the publication, search giant Baidu Inc. and Geely Automobile Holdings Ltd.are also said to be teaming up to build electric cars.
Xiaomi will reportedly outsource car assembly to contract manufacturers – similar to its smartphone model. For the unaware, the company relies on contract manufacturers such as Taiwan’s Foxconn Technology Group to make its mobile devices. That being said, it has no plans to choose “established” automakers for its manufacturing partners.