Xiaomi Enters Electric Vehicle Market With 10 Billion Yuan Investment

Xiaomi announced plans to enter Electric Vehicle (EV) market with a 10 billion dollar investment over the next 10 years.

Credit: VCG

The China tech giant is looking to expand into the EV market and Lei Jun, the company’s founder, Chairman and CEO, has stated that they will be investing US$10 billion over the next 10 years for the new venture. He will also serve as the EV business’ CEO. Furthermore, Lei Jun mentioned that the company’s smart EV business will be operated under a Xiaomi wholly-owned subsidiary with an initial investment of RMB 10 billion.

Xiaomi’s official notice to the Hong Kong Stock Exchange Credit: Xiaomi

“Entering this business is a natural choice for us as we expand our smart Artificial Intelligence of Things (AIoT) ecosystem and fulfil our mission of letting everyone in the world enjoy a better life through innovative technology,” Lei Jun said. He has also stated that he will be putting his personal reputation on the line and fight for the future of the company’s smart electric vehicle. “I am determined to lead my team to fight for the success of the Xiaomi EV,” Lei Jun added.

In an internal letter to employees, he expressed that the company has numerous core technologies already on hand that can be applied to the smart electric vehicle business. Xiaomi also has a deep understanding of the hardware-based internet service business which will help its smart EV business to succeed. This is due to the traditional automotive industry’s transformation due to smart electric vehicles. Additionally, the company has extensive experience in software and hardware integration and profound manufacturing know-how within the internet industry.

A Tesla Model 3 EV Credit: Tesla

High EV sales were recorded in 2020 despite the COVID-19 pandemic according to data published by EV-volumes.com. This was due to many factors such as an EV’s performance and range improvements over internal combustion engine (ICE) vehicles and government support in various countries such as China and Singapore.

CNBC reported that EVs have become more popular in China due to its government’s strong policy support and subsidies. Canalys, a research firm, predicts that 1.9 million EVs will be sold in the country in 2021 even though the Chinese government cut EV purchase subsidies were cut in half in 2019.

The Singaporean government meanwhile, has stated that they are aiming to populate roads with EVs by 2040. The Singapore Green Plan 2030 was announced on 10 February 2021, aiming to “strengthen the country’s ongoing efforts to implement the country’s commitments under the United Nations’ 2030 Sustainable Development agenda.”

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Written by John Paul Joaquin