Xiaomi Chinese smartphone giant has announced its plans to launch an electric vehicle business and invest $10 billion over the next 10 years. The company plans to set up a wholly-owned subsidiary with an initial investment that will total 10 billion yuan ($1.52 billion), in the first phase.
Chief Executive, Xiaomi, Lei Jun will also be the CEO of the car unit. “Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere,” the company said in a statement. The Chinese technology firm, which is the world’s third-largest smartphone maker, is jumping into an incredibly competitive space in China.
Xiaomi is prepared to compete with established automakers in the country, such as Geely and Warren-Buffet backed BYD, and others such as Nio and Xpeng Motors. Internet companies are also entering the smart electric vehicle arena. Chinese search giant Baidu launched a standalone electric car company in January and last month hired a CEO for that business.
Electric cars have taken off in China thanks to strong policy support from Beijing, including subsidies. Even though some of these measures have been reduced, research firm Canalys forecasts that 1.9 million electric vehicles will be sold in China in 2021, representing year-on-year growth of 51 per cent.