The new Chinese tech giant to join in the red-hot electric vehicle market is Xiaomi with a $1.52 billion investment to set up a fully owned subsidiary for its auto business, to be led by founder and CEO Lei Jun.
Last startup project of founder Lei
In a press event held on Tuesday, Lei said Xiaomi had taken a decision to start a business in EVs on its own, and will not consider outside funding. Lei said he was aware of the complexities of making cars with extreme capital intensity, saying that the company is now ready to pour money into the project and also ready to face losses over a long-term period.
The 52-year-old serial entrepreneur said, “We look forward to the day when Xiaomi cars will run on roads across the globe. This would be the last startup project in my career and I shall stake all I have to work this out.” Xiaomi said in an announcement published Tuesday, the company plans to invest a total of $10 billion in the project over the next 10 years.
According to Lei, Xiaomi would follow Apple’s footsteps and strive to develop high-quality EVs with a “best-in-class” connected device ecosystem for global customers.
What do the sales figures say till now?
According to figures from Canalys, the world’s fourth-biggest smartphone maker recorded shipments of nearly 150 million units in 2020 with an annual growth rate of 19%. Sales for competitors Samsung and Huawei shrank a respective 14% and 22%,
According to data compiled by Beijing-based consultancy All View Cloud (AVC), Xiaomi also boasted of having one of the world’s biggest Internet-of-Things (IoT) platforms, connecting 325 million smart home appliances as of last year, excluding handsets and laptops. It has also remained the top-selling television set maker in China since 2019, accounting for around 20% of the market share.
However, according to Bloomberg, the Chinese consumer electronics giant is seeking new sources of growth amid a slowing market. Its IoT and consumer products segment slowed sharply to 8.6% annually last year from 41.7% in 2019. The company also missed analyst revenue estimates for the fourth quarter.
Global automotive trends- whoever adapts fast, will reap the most benefits
The global automotive industry is witnessing a great shift to battery-electric, self-driving cars from traditional, internal-combustion vehicles which has reached a major inflection point. China is expected to maintain its global leadership in EV production and adoption. IHS Markit forecasted that as the consumer demand recovers and the government continues to support the EV industry, China will regain growth momentum at double-digit rates in 2021 and beyond.
