Chinese smartphone maker Xiaomi has decided to build cars, amid a period of stagnant growth across the global smartphone industry, according to Chinese media outlet LatePost, citing multiple sources familiar to the matter.
The project is considered a strategic decision and could be led by company founder and CEO Lei Jun, the report said.
The exact form and path of the new venture are still in the works and nothing is set in stone yet, the sources said.
Following the news, Hong Kong-listed Xiaomi surged back from a decline in morning trading to add 6.5% on the day. Xiaomi declined to comment when contacted by Pandaily.
Since his two 2013 visits with Tesla CEO Elon Musk in the US, Lei has toyed with the idea of auto manufacturing. Xiaomi’s venture capital arm Shunwei Capital has invested in EV start-up NIO in 2015, as well as in XPeng in 2016 and 2019.
According to documents published on the National Patent Office website, Xiaomi has filed a list of patent applications including cruise control, navigation, assisted driving and other car-oriented technologies since 2015, LatePost reported.
Xiaomi’s Xiaoai virtual assistant system has already been implemented via a range of strategic cooperations, including in Mercedes-Benz vehicles and FAW Group’s special-edition model of the Bestune T77 crossover.
In June 2020, the company registered a Chinese trademark that roughly translates as “Xiaomi car alliance” and related graphic trademarks.
Beijing-based Xiaomi overtook Apple to become the third largest smartphone maker in Q3 2020, shipping 46.2 million devices amounting to a market share of 13%, according to data provider Counterpoint Research.
Xiaomi’s potential new venture might not come as a surprise to many — it follows in the footsteps of fellow tech giants such as Baidu, Alibaba, Tencent and Huawei in its entrance to the world’s largest auto market, the Chinese mainland.
Baidu has set up a new EV firm with Geely, while Alibaba has developed Zhiji, an electric car startup joint venture with SAIC. Tencent also has partnered up with Foxconn and China Harmony to start producing smart electric vehicles and Huawei has announced plans to develop new models with state-owned carmaker Changan.
The Chinese government has included autonomous cars as one of the key sectors in its ‘Made in China 2025’ initiative, which aims to transform the country into a leading manufacturer of high-end, innovative products.
The government hopes to see 30% of cars sold by 2025 to have smart connectivity and has been providing extensive policy support to the EV sector, including tax subsidies, license plate laws, and registration benefits.