The company had joined the EV race back in March.
Xiaomi CEO Lei Jun said that the company will start mass production of its own electric vehicles (EV) in the first half of 2024.
In response to the news, Xiaomi’s shares in Hong Kong jumped 5.4% to HK$22.50, the biggest daily percentage rise since May 12.
Contents
Background
The company had joined the EV race back in March.
It completed the business registration of its EV unit- Xiaomi EV Inc- and was opened with a registered capital of $10 billion.
The unit has employed 300 people and recruitment is still ongoing.
Strategic Acquisition
It purchased autonomous driving technology startup Deepmotion for over $77 million.
The company is involved in autonomous driving technologies and its acquisition would help Xiaomi improve its research capabilities and efforts.
It faces intense competition in a space which is getting crowded by the day.
This growth can be attributed to favorable government support over the last few years.
Competition
One such rival is Chinese search giant Baidu which launched its EV company in January and hired its CEO in February.
Another smartphone manufacturer Huawei also reportedly plans to enter the EV vertical and is in talks with Changan Automobile and BluePark New Energy Technology.
Other firms dominating the Chinese market- Nio and Xpeng- along with Tesla and the Warren Buffett-backed BYD “Build Your Dreams” could pose a challenge when Xiaomi debuts.
Production Duties
1.9 million electric vehicles have been forecasted to be sold in China in 2021, growing 51% year-on-year.
It remains to be seen whether Xiaomi will produce the vehicles by itself or outsource it to a third-party company, such as an existing automaker.
The latter seems more likely considering the high entry barrier of the car manufacturing business.
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