Chinese smartphone maker Xiaomi is taking the next logical step in the industry by stepping into the smart car business. The company plans to launch an electric car in around 2023 and hopes that its hardware expertise will accelerate the design process.
The automaker has already begun developing EV models and is planning to partner with domestic carmaker Geely Automobile Holding Ltd to develop EV units. The upcoming EV will be called the Mi Ai.
The company says it will invest $10 billion over the next ten years in its electric car division. The electric vehicle unit was registered in late August, and the company has started hiring for it.
It has not yet revealed whether the company will produce the car independently or partnering with a well-established automaker. It has not confirmed whether it will make the car on its own or work with another company to produce it.
Xiaomi subbrand SmartMi to Step into Smart Car Business- Partnership
Xiaomi has partnered with Geely Automobile Holding Ltd to launch the electric car. The two companies will be working together to develop the technology.
The EV will be able to charge itself and drive itself. Although it has yet to unveil its first model, it has announced plans to outsource the manufacturing process to contract manufacturers. Despite the upcoming EV, it is not expected to be available until 2020.
While the electric car has yet to be announced, it has been rumored that Xiaomi will enter the smart car business. Currently, it is unclear how far along the company is with its plans.
But the move to move into the car business is not as zany as it may sound. It is a necessary step to diversify revenue streams, as the company relies heavily on the smartphone industry, which has razor-thin profit margins. In its latest quarterly report, the company flagged rising costs stemming from a global chip shortage.
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Xiaomi subbrand SmartMi to Step into Smart Car Business- Inside Details
While many tech companies have expressed interest in the auto industry, the Chinese company has stayed focused on software and services. Its smartphones are cheap and relatively low-cost compared to other brands.
The company is stepping into the smart car business, but it hasn’t yet officially announced it. Its EV division is still in development, but the automaker has said it wants to reduce the development time for its electric car.
Meanwhile, Xiaomi is partnering with domestic automaker Geely Automobile Holding Ltd. This move will allow Xiaomi to better control its market in the smart car industry.
The Chinese company has partnered with Geely Automobile Holding Ltd to form a new entity called Xiaomi Auto Co Ltd. It will sell hardware devices under its own brand. However, it will outsource car assembly to contract manufacturers.
Xiaomi subbrand SmartMi to Step into Smart Car Business- Investments
Besides, the company plans to focus on existing products. In the meantime, it plans to step into the smart car business. With its existing cash reserves and a global smart vehicle ecosystem, Xiaomi is planning to step into the smart car business.
Xiaomi has already announced its plans to invest $10 billion into its electric car division. This investment is intended to accelerate the development of its EV. It has also set up a wholly-owned subsidiary for the EV business.
It plans to produce the car independently or in collaboration with an existing automaker. The initial investment will be around $1.54 billion, and the company aims to invest up to $10 billion over the next decade.
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Xiaomi subbrand SmartMi to Step into Smart Car Business- Wrap Up
The move comes at a time when Chinese carmakers are working with tech firms to develop smarter cars. While automakers are focusing on developing driver-assistance software, Xiaomi is aiming to cut the time to market.
Its founder Lei Jun previously led funding rounds for Shanghai-based Hesai Technology Co. LTD., and the company’s other partners include Zongmu Technology Shanghai Co. Ltd., which supplies EVs to the FAW Group.
While the automaker and tech companies are collaborating to develop smarter cars and autonomous driving technology, the company has been acquiring companies to build their own products.
Its acquisition of DeepMotion, a four-year-old driver assistance software developer, will help it shorten the time to market. The deal will also speed up R&D and development of self-driving software.