In March, Xiaomi, the Chinese tech giant, announced its plan to expand its business beyond the smartphone industry by launching its very own electric vehicle business with an investment of $10 billion dollars for the upcoming 10 years. It seems like Xiaomi is on the right track and has recently just acquired Deepmotion, an autonomous driving company for around $77.37 million dollars to “enhance the technological competitiveness” of its electric vehicle business.
By setting foot in the electric vehicle industry, Xiaomi would face a lot of competition from already established companies like Baidu and Huawei as well as upstarts like Tesla, Nio, and Xpeng Motors. This decision came after Xiaomi released its financial results for the second quarter of the year which saw an increase in year-on-year revenue of about 64% or $13.5 billion dollars which was a record high for the company. Out of the total revenue generated by the company, about 67.3% came from their smartphones. According to Xiaomi, it doesn’t want to rely solely on the sales of its mobile phones rather it wants to introduce electric vehicles and hopes it would be a good new revenue stream for the company in the future.
When talking about this new venture, Lei Jun, Xiaomi Chief Executive, said in a statement, “Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere.” It seems like Xiaomi is on the right track as Canalys, a research firm forecasted that about 1.9 million electric vehicles will be sold in China in 2021 with a year-on-year growth of 51%. While the competition is tough, there’s a growing need for electric vehicles in the country as different policies are being introduced by the Chinese government in support of the EV market and to electrify all of their cars by 2030. That’s a bit too ambitious but a good start nonetheless.