Xiaomi has a diversified portfolio of products that goes far beyond smartphones. But it seems that it hasn’t done enough exploration already. Xiaomi wants to dabble into the Electric Vehicles industry as well, the company revealed Tuesday.
The Chinese smartphone maker, currently ranked number three OEM, according to Canalys, will initially invest 10 billion yuan (around $1.5 billion). Over ten years, the company plans to have invested around $10 billion as it carves its path into the smart electric vehicles industry.
This marks Xiaomi’s first actual initiative to enter the automotive industry. Xiaomi’s current CEO and Founder, Lei Jun, will also head the new business arm. Venturing into the car business is not easy, which explains why it’s uncommon to see new companies enter the industry very often. Let alone a newcomer becoming a mass-market carmaker.
“The decision was made after numerous rounds of deliberation among all our partners, and this will be the final major entrepreneurial project of my life,” Jun said in a statement(via BBC).
In Xiaomi’s case, with close to $12 billion relaxing in its cash reserves, the company has ample resources to venture into the industry, Reuters reports. But money only gets you so far; You also need other things to succeed in any market.
Notably, Xiaomi has invested in a dozen companies with technology related to the EV industry. Furthermore, the company is also said to have several relevant patents under its name.
The Widespread EV Mania
Xiaomi has in the past been reported to consider venturing into the EV industry for quite some time. Perhaps, now could be the best time to make such a move, with so much frenzy surrounding electric vehicles.
In China, the EV race is fierce. Different technology companies have plans to enter the market by either making their cars or partnering with existing makers to develop new driving technologies.
Traditional carmakers are also going electric to retain their relevance as more people adopt EVs.
Apple is also pushing into the EV market with the so-called Apple Car. Even for them, reports of entering the EV market can be traced way back to as far as 2014. Tim Cook confirmed that Apple was working on a driver-less car in 2017.
Xiaomi plans to “offer quality smart electric vehicles.” However, it remains to be seen whether Xiaomi will target the budget EV market, maintaining its budget proposition like in other business ventures, or going for the jugular – the premium market.
No launch date has been offered for when we should see Xiaomi’s first commercial car out.