The third-largest smartphone manufacturer, Xiaomi has announced its plans to launch smart electric car business.
The company will set up a wholly-owned subsidiary and the initial investment will be RMB10 billion (RM6.3 billion).
I announced a major decision on the launch event tonight:— leijun (@leijun) March 30, 2021
Xiaomi is officially entering the smart electric vehicle industry. I’ll lead the project myself and we will have RMB 10 billion for first round investment, USD 10 billion for long-term investment across the next decade. pic.twitter.com/NzfgqLX2AJ
Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere, in Xiaomi company's statement.
Lei Jun, the founder and chief executive of Xiaomi, said at this company's Mega Launch of the Mi 11 Pro and Mi 11 Ultra yesterday, this push into the electric car market represents "the last entrepreneurship of my life". Lei is 51-years-old this year.
Xiaomi expects to spend up to USD10 billion (RM41.5 billion) over the next 10 years on this smart electric vehicle project.
Lei Jun will also be heading this new business as its chief executive.
“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.”
Lei drives a Tesla. He commented that he has long pondered on Xiaomi's move into EVs because the competition in smartphones remains fierce. His friends advised him not to miss out on this market.
The demand for electric vehicles at the high and low ends of the market is very strong at the moment. The sales of battery-powered and hybrid vehicles in China hit record highs in December last year, recording nearly 10% of the country's entire automotive market, reported by Financial Times.
China's government is looking to increase electric car sales to 20% of the total automotive sales by 2025.
Tu Le, founder of Sino Insights commented that Xiaomi is basically following Apple's footstep and move toward EVs.
“They’re going to be pouring billions of billions of dollars into this to enter the most competitive auto market in the world,” he said.
Currently, Tesla leads China's EV market, with other Chinese start-ups in play, NIO, Xpeng and Li Auto.