- Chinese phone-maker Xiaomi plans to invest $10 billion into a new EV unit over the next ten years.
- The unit will be a wholly-owned subsidiary led by Xiaomi CEO Lei Jun, it said.
- It will launch into a competitive market with more experienced EV companies including Tesla and Nio.
- See more stories on Insider’s business page.
Xiaomi is serious about entering the electric vehicle race.
Rival phone-makers Apple and Huawei are reportedly also making their own electric vehicles, though neither company has confirmed this.
Xiaomi said it would create its electric vehicle unit as a wholly-owned subsidiary, with an initial investment of 10 billion yuan ($1.52 billion).
Xiaomi co-founder Lei Jun will serve as the CEO of the new unit, while also remaining CEO of the wider company.
“This will be the final major entrepreneurial project of my life,” he said in a statement, per The BBC.
The EV market in China is booming
But Xiaomi will be launching its cars into a competitive market.
China, which is the world’s largest car market, is ramping up its efforts to boost electric vehicle sales as it tackles the country’s pollution problem.
Thanks in part to generous government subsidies, Chinese startups Nio, Li Auto, and Xpeng all announced surging sales in 2020.
Tesla is also cashing in on China’s electric vehicle demand, after starting manufacturing there in 2019. The country accounts for more than a fifth of Tesla’s revenue, and Wedbush analyst Daniel Ives has said Tesla could sell 1 million vehicles in China in 2022 because of “eye-popping demand.”
Other smartphone companies are moving in on the booming electric vehicle market, too.
Apple plans to build a self-driving electric car by 2024 and has held talks with Hyundai, Kia, and Nissan about partnering, according to multiple reports. The tech giant has made no public announcements about its self-driving car project, which is internally known as “Project Titan,” though it has recently patented some vehicle features.
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