China based smartphone and IoT major, Xiaomi, has officially announced that it is venturing into the electric vehicle segment and is going to establish a wholly owned subsidiary that will operate its new smart EV business. This new venture will reportedly be headed by the founder and CEO of Xiaomi, Lei Jun as its CEO.
It has been reported that the company will initially invest $1.52 billion into the business with the total investment reaching to $10 billion over the span of ten years.
At present it is unclear if Xiaomi will sell the cars under its own brand and contract manufacturers to manage the production, as the company has followed the similar trend for most of its hardware products.
Xiaomi is reportedly the latest Chinese tech company to make its debut in the red-hot electric vehicle industry. According to the credible sources, in January, Chinese search engine behemoth, Baidu, unveiled plans to manufacture EVs in partnership with prominent carmaker Geely.
While, Alibaba and China’s state-owned automotive company SAIC Motor have also announced a collaboration in November of 2020 for producing electric cars. EV manufacturer BYD and leading rideshare company Didi are also jointly developing a model for ride-hailing.
The internet giants are apparently competing with a bunch of highly specialized EV startups like Nio, Xpeng, and Li Auto, which have already launched several models and are considered as rivals to Tesla. They take consistent efforts to differentiate from each other by investing in functionalities ranging from in vehicle infotainment to autonomous driving.
Sources of knowledge suggest that the wide retail network of Xiaomi and international recognition will prove advantageous for it while entering the car manufacturing business. Some of its smart devices, like smart air purifiers and speakers could be easily installed into its vehicles which will serve as selling points for the company. However, the challenge is in manufacturing as unlike phone production, automotive business involves huge capital and robust supply chain.
Source credit: https://techcrunch.com/2021/03/30/xiaomi-ev-subsidiary/
