Chinese multinational electronics company Xiaomi is planning to manufacture electric vehicles (EVs) at the country’s Great Wall Motor Co Ltd’s plant, making it the latest tech company to join the smart mobility race.
Xiaomi, one of the world’s largest smartphone manufacturers, is reportedly in talks to use one of the Great Wall’s factories to produce EVs under its brand.
Xiaomi is expected to sell its EVs to the mass market, in line with the company’s broader positioning of electronics products. Great Wall, which has never provided manufacturing services to other companies before, will provide engineering consulting to help speed up the project. Both companies plan to make the partnership announcement as soon as next week. Xiaomi and Great Wall have declined to make any comments.
The step comes as Xiaomi, which has been around for eight years, looks to diversify its revenue sources away from the smartphone market, which accounts for the majority of its income but has razor-thin profit margins. Recently, the phone maker warned of increased costs due to a global chip shortage and posted quarterly revenue that fell short of expectations.
The transition also comes against the backdrop of automakers and tech companies collaborating more closely to build smarter vehicles with features like smart cabins and autonomous driving.
Baidu Inc, a Chinese search engine firm, had recently revealed that it plans to manufacture EVs at a Geely-owned factory. Apple Inc. and Huawei Technologies Co both have publicized auto ambitions.
Xiaomi’s founder and Chief Executive Officer Mr.Lei Jun believes that the company’s experience in hardware manufacturing would assist in the design and development of its EVs. Xiaomi offers a wide range of internet-connected devices, including scooters, air purifiers, and rice cookers, in addition to smartphones.
The company expects to release its first EV in 2023. It will make it possible for its automobiles to connect with other devices in its product ecosystem. Great Wall, China’s largest pickup truck producer, unveiled a separate brand for electric and smart vehicles this year. It is also constructing an EV factory in China with BMW AG of Germany.
The popularity of models like the P-series pickup truck and Ora EVs has helped the automaker sell 1.11 million vehicles last year.