Xiaomi has announced its plans to enter the EV market and plans to invest about $10 billion over the next decade for this.
The company will set up a wholly-owned subsidiary for electric vehicles, which will be led by Xiaomi's co-founder Lei Jun. The company will first invest $1.5 billion (10 billion yuan) in smart vehicle manufacturing.
This Will Be the Last Project of Xiaomi Co-Founder's Career
Last week, a report claimed that Xiaomi is in discussions with the Great Wall Motor for building electric cars in China. However, today's announcement from Xiaomi did not mention anything about this partnership. The Great Wall Motor also refuted such reports when they first emerged.
As Bloomberg notes, Xiaomi's CEO Lei Jun said that the company aims to take full control of its car-making business. Additionally, this will be the "last startup project" of Lei Jun's career.
In a filing submitted to the Hong Kong Stock Exchange, Xiaomi said that it "hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere."
The report further claims that Lei Jun had been reviewing the EV industry's potential for the last few months, with the final decision to enter it being made just a few weeks ago. Xiaomi has also already hired engineers to work on the software that will be embedded in its cars.
Xiaomi's CEO Lei Jun also said that the company is fully aware of the risks this project entails and that it has a deep pocket for it. He also noted that the project would take "at least three to five years with tens of billions of investment."
Despite the investment in smart vehicle manufacturing, it is unclear if Xiaomi will be make the vehicles on its own or outsource production to a contract partner as it does for its smartphones and other products.
Electric Cars Are the Future
It is only a matter of time before electric cars replace vehicles with internal combustion engines. Thus, it is not surprising that most major tech companies are interested in building an EV of their own as it would offer them an opportunity to disrupt the market.
Apple is working on self-driving EVs, with Chinese search engine giant Baidu also entering into a partnership with Geely for making smart EVs.
Xiaomi products are known to bring high-end technology to the masses. It is possible the company could adopt a similar approach for its EVs as well.