Xiaomi to make smart electric vehicles, announces $10 billion investment
What's the story
Chinese tech giant Xiaomi has announced its entry into the automotive industry. According to an official filing with the Hong Kong Stock Exchange, the company will set up a "wholly-owned subsidiary" to commence and operate a new smart electric vehicle business. Lei Jun, the co-founder and CEO of the Xiaomi Group, will concurrently serve as the CEO of the EV business.
Twitter Post
Take a look at the official statement
BREAKING NEWS
— Xiaomi (@Xiaomi) March 30, 2021
Say hello to #XiaomiSmartElectricVehicles.
Get all the information at our #XiaomiMegaLaunch Part II tonight! 19:30 (GMT+8), 2021! pic.twitter.com/gq3Kue2pF1
Goal
The company aims to offer quality smart EVs
As per the stock exchange filing, Xiaomi "hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere." It is unclear whether the company will produce and sell EVs under its own wings or tie up with contract manufacturers for producing the vehicles. We also do not know if Xiaomi will focus on manufacturing, software, or both.
Information
Xiaomi will initially invest 10 billion yuan
Xiaomi has confirmed that it will initially invest CNY 10 billion ($1.52 billion) into the smart electric vehicles venture. Over the next 10 years, the total investment amount will reach around $10 billion.
Brand recognition
Global brand identity will prove to be a key advantage
Xiaomi, often touted as an "internet firm," is known world over for its Android-powered smartphones, wearables, lifestyle products, IoT devices, and laptops. The tech giant's global recognition will prove to be an obvious advantage to market its electric vehicles as well as offer a connected driving experience using its established ecosystem.
Competitors
Xiaomi will face competition from established auto giants
The EV industry is slated to become a $5 trillion market opportunity over the next 10 years. Xiaomi will face competition from Tesla, Volkswagen, BMW, General Motors, and Jaguar Land Rover - they have been working for years to develop and sell electric vehicles. Back home, Xiaomi will take on rivals like Xpeng, Nio and Li Auto, which have already introduced multiple models.