Xiaomi Corp, one of the world’s largest smartphone vendors, is joining the fray in the country’s booming electric vehicle (EV) industry, as it announced a long-anticipated plan to produce all-electric cars in the industry’s largest market.
Lei Jun, the billionaire founder and chief executive of Xiaomi, said at the company’s Mega Launch event on Tuesday that this push into the electric car market represents “the last entrepreneurship of my life”, without elaborating.
The Beijing-based company behind the Mi Android smartphone brand will kick off its electric car project with an initial investment of 10 billion yuan (US$1.5 billion), and expects to spend up to US$10 billion in this enterprise over the next 10 years, Xiaomi said in a statement after trading hours in Hong Kong. Lei will head the new business as its chief executive, according to the company
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“What do we have? We have money,” Lei said at the event. “More importantly, we have 10,000 people in R&D and we will add another 5,000.”
The 51-year-old Lei said he knows “the risks that this endeavour entails” and that the company’s investment “won’t see a result in the next few years”. He indicated that Xiaomi “is a different company from the small start-up 10 years ago that had only three to five people”, adding that the firm has “accumulated a lot of wisdom and experience” to be able to test the waters of the electric car industry.
The Hong Kong-listed firm is the latest tech company to join the smart mobility race in the world’s largest car market.
Telecommunications equipment maker ZTE Corp said in March that it was looking to build a team for a new EV product line, without elaborating whether the it will supply parts for partner companies, or whether the Shenzhen-based firm would produce its own branded cars.
Huawei Technologies Co, whose core smartphone and telecoms equipment businesses have struggled amid US trade sanctions, has been exploring a shift in strategy, with plans to make EVs under its own brand and launch its initial car models this year, according to a Reuters report last month. Chinese search engine provider Baidu said in January that it plans to make EVs using a plant owned by Geely Automobile Holdings – a Hong Kong-listed carmaker with aspirations to offer engineering consultancy and contract manufacturing.
Xiaomi, which outsources the production of its smartphones, smart bands and other gadgets to Foxconn Technology Group, is likely to engage a contract manufacturer to assemble its EVs. Great Wall Motors, China’s largest maker of sports utility vehicles, last week refuted a Reuters report that said Xiaomi would use its factories to make electric cars.
The EV initiative of Xiaomi comes as the sector is expected to record massive growth in the coming years. Digital services and products slated for China’s EVs industry could reach 1 trillion yuan a year, according to a forecast by China’s Ministry of Industry and Information Technology, although it did not specify when.
Lei, who said he drives a Tesla, indicated that he thought long about Xiaomi’s move into EVs because the competition in smartphones remains fierce. Still, one of his friends warned him not to miss the opportunity to take on the industry because a number of the company’s peers and competitors either have plans or already entered the market.
Despite his initial reluctance, Lei said he finally decided that Xiaomi enter the EV industry on January 15 this year, the same day the company was added by Washington to the US trade blacklist. “Someone said that a smart electric vehicle is like a smartphone with four doors,” he said, adding that the comparison helped him find a connection between Xiaomi’s main business and its upcoming endeavour.
At day two of Xiaomi’s Mega Launch event on Tuesday, the company introduced its first foldable smartphone, the Mi Mix fold. Priced at 9,999 yuan, the device runs Qualcomm’s Snapdragon 888 chip and measures 6.52 inches when folded. Lei said it can be used as a productivity tool, like a tablet.
The company also launched its Surge C1 image signal processing chip on Tuesday.
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