NEW DELHI: Chinese tech giant Xiaomi has now officially confirmed its entry into the electric vehicle (EV) space. The smartphone giant will set up a wholly-owned subsidiary to operate a smart EV business, it said. Xiaomi will initially invest 10 billion yuan ($1.52 billion) into the venture, with the total investment expected tp reach $10 billion over the next ten years. Xiaomi founder and Chief executive Officer Lei Jun will serve as the CEO of the new EV venture.
“The board of directors of the company has resolved to commence the electric vehicle business...Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere,” said the company in a statement. It is unclear from the available information whether Xiaomi will start its EV operations by making a four-wheeler or a two-wheeler. It is also not known yet whether Xiaomi will go solo, form a partnership or take the contract manufacturing route.
Last week, news agency Reuters had reported that Xiaomi was in talks to partner with Chinese automaker Great Wall Motor Company for help in manufacturing EVs. It is expected that Xiaomi’s EV will be initially sold in China initially. However, it won’t be surprising if India happens to be one of its first global markets for EVs. Xiaomi dominates India’s smartphone and smartTV market, and has one of the biggest retail network for any electronic company.
As the auto industry is moving from traditional internal combustion engine-powered vehicles to battery powered vehicles, the EV market continues see the entry of tech behemoths. In January, Chinese search giant Baidu Inc had announced it would develop an EV unit, while Huawei and Apple have also long been planning an entry into the electric vehicle market.
“We have a deep pocket for this project,” news agency Bloomberg reported Xiaomi chief executive officer Lei Jun saying at an event in Beijing. “I’m fully aware of the risks of the car-making industry. I’m also aware the project will take at least three to five years with tens of billions of investment.” During the press event, to make the announcement on its entry into the EV segment, Xiaomi also announced the release of a self-developed computing chip.
Called the Surge C1, the chip is an image signal processor (ISP) that is used to enhance a phone’s ability to process high-resolution images and video. Xiaomi pointed out that it has taken over two years and expended a $140 million investment in its efforts to develop the chip, which is expected to be placed in the newly announced Mi Mix folding phone. While the competitor Huawei has had success in the semiconductor space, Xiaomi lags.