The Chinese company said it will initially invest around $1.52 billion in the creation of the new business
Around four days ago, anonymous sources speaking to Reuters revealed that Xiaomi was in discussion with Great Wall Motor Co, China’s largest SUV and pickup manufacture, over the use of the latter’s factory to build electric vehicles (EVs) under the Xiaomi brand. According to the sources, the company could launch its first EV by 2023.
Today, these rumours were confirmed, when Xiaomi formally announced the aforementioned partnership, providing an initial investment into the project of around $1.52 billion. While the timelines and details of the deal reamin unclear, Xiaomi says they expect this investment to increase to $10 billion over the following decade.
The partnership will involve the creation of a new subsidiary, with Xiaomi’s CEO Lei Jun also serving as CEO of the newly created entity.
While primarily a smartphone manufacturing company, Xiaomi has noted in the past a need to diversify its revenue streams, particularly in the wake of the ongoing semiconductor supply crisis which is causing delays to various tech projects around the world. In announcing its electric vehicle ambitions, the Chinese company joins the likes of Apple and Huawei, both of whom have announced plans to enter this rapidly growing market over the last few months.
This union between automotive manufactures and tech firms is becoming more and more common, with the creation of smarter vehicles representing not only a fresh source of income for tech players, but a necessary partnership for automotive firms who have less historical prowess when it comes to integrating software.
The demand for EVs around the world is growing strongly, meaning that the EV space could soon grow into a key proxy battlefield for the some of the world’s largest tech companies, and Xiaomi will certainly not be left out.
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