The currently second largest Chinese smartphone manufacturer Xiaomi has completed the official registration of its new electric car division. The new division will operate under the name Xiaomi EV Corp Inc, as the company announced on Wednesday. Xiaomi specifies 10 billion yuan, about 1.31 billion euros, as start-up capital. As the legal representative, Xiaomi boss Lei Jun will direct the fortunes of the company.
As Xiaomi announced in a blog post, the company has hired around 300 employees since it announced it was entering the electric car business at the end of March. The new company is currently looking for more employees.
It is still unclear what Xiaomi’s strategy will look like in order to gain a foothold in the automotive sector. Nothing specific is known about planned vehicle types either. Xiaomi seems to want to focus on autonomous driving. The company intends to take over the start-up for self-driving technology Deepmotion for around 77 million US dollars, about 65.1 million euros.
Apparently, Xiaomi is still in a discovery phase anyway. In a period of five months to the end of July, around 2000 surveys were carried out to identify potential customer requirements. The supply chains were also inspected and possible partners from the industry were spoken to. According to Reuters Xiaomi also contacted several automakers with whom the company could work. However, nothing is concrete yet.
Billions to get started
Xiaomi announced at the end of March that it wanted to enter the electric car business. Lei said at the time that this venture would be his “last big project”. Xiaomi also wants to reach into its pocket for this. About 10 billion dollars should be available for this within ten years. At the moment the cash register for this project should be well filled. Because with the weakness of the Chinese smartphone manufacturer and telecommunications supplier Huawei due to the sanctions imposed by the USA, which affect the smartphone and telecommunications business, Xiaomi has been able to significantly expand its position as a smartphone manufacturer. Xiaomi, which in addition to mobile devices also manufactures other electronic products, including electric scooters, increased its sales by 64 percent and its net profit by 87.4 percent in the second fiscal quarter.