Xiaomi holds talks with carmakers about possible partnerships to build EVs
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Chinese smartphone giant Xiaomi is waiting for Beijing to approve a licence that would give it the right to manufacture electric cars.
PHOTO: REUTERS
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Xiaomi has held talks with established automakers on potential production partnerships, sources familiar with the matter said, as it waits for Beijing to approve a licence that would give it the right to manufacture electric cars itself.
The Chinese smartphone giant, which has ambitions of becoming a producer of its own brand of electric vehicles (EVs), has engaged with several carmakers including Brilliance Auto Group Holdings and Chery Automobile, the sources said, asking not to be identified because the discussions are private.
Xiaomi has also held talks with Beijing Automotive Group on potential collaboration around producing EVs, Bloomberg reported in August 2022.
Xiaomi’s casting of a wider net comes as China seeks to limit the number of EV production licences as the nation’s new-energy vehicle market matures. After growing at a breakneck pace via years of generous subsidies, the EV sector is plateauing somewhat and existing players are slashing prices to spur consumer demand.
That has seen aspiring market entrants pushed into partnerships with licensed manufacturers, or pivot their business plans entirely.
Xiaomi declined to comment. Representatives from Brilliance Auto and Chery did not respond to calls and e-mail requests for comment.
Meantime, Xiaomi is still working to obtain the relevant approvals from the Ministry of Industry and Information Technology, which signs off on EV production, the sources said.
Deliberations with other automakers are ongoing and there is no certainty any partnerships will materialise, they added.
Xiaomi’s co-founder Lei Jun has pledged to invest around US$10 billion (S$13.6 billion) in making EVs a reality for the technology group and still hopes to debut its first electric car in 2024.
Bloomberg Intelligence said in September that the company’s EV push could be a drag on profit over the next two years with a less than 5 per cent sales contribution.
Through cost-cutting efforts, Xiaomi managed to report better-than-expected net income of 3.67 billion yuan (S$697 million) in the three months ending in June, above the average estimate of 3.16 billion yuan. Revenue slid by 4 per cent to 67.4 billion yuan. BLOOMBERG
