Xiaomi demands payout from supplier after car designs leaked

Xiaomi demands 1M yuan from the supplier who leaked early design drafts

China’s Xiaomi is imposing a 1 million yuan penalty, around $149,000 on the supplier who leaked the automaker’s design drafts. It was the design for an upcoming car model and is being dealt with seriously by Xiaomi. On its official Weibo page, the spokesperson said that they are dealing with the Beijing-based molding technology company seriously.

Xiaomi demands payout from supplier after car designs leaked
Image credits- Nasdaq

The revealed designed drafts included images of the upcoming car’s front and rear bumpers, violating a confidentiality agreement. The images were leaked on January 22, said to be leaked accidentally. However, according to the confidentiality agreement signed between Beijing Molding Technology and Xiaomi Auto, the former will be held responsible for the incident. Beijing molding will have to pay a hefty fine of 1 Million Yuan to Xiaomi for breach of contract and tighten the security measures with its downstream operations.

CEO Lei Jun said that Xiaomi had zero tolerance for leaks and hoped that all partners and suppliers would abide by the Confidentiality Agreement. The hefty fine was a lesson to all partners that Xiaomi will not accept or allow such incidents and will deal strictly with defaulters.  Apart from the fine, Xiaomi has asked Beijing Molding Technology to also submit a detailed rectification plan that can upgrade and improve the existing security measures.

Leaked images

Chinese social media went berserk last week when the images of Xiaomi’s upcoming EV were leaked. The leaks showed a sleek and sophisticated image of a sporty Sedan that was named MS11. The EV has been spotted multiple times in China with CEO Lei Jun test-driving the car. However, all test drives were done under wraps with utmost secrecy.

In March 2021, Xiaomi announced that it will join the EV sector and planned to invest $10 billion over the next 10 years. In August 2021, it acquired the autonomous driving company Deepmotions for $77 million. Last year CEO Lei Jun said that autonomous driving was the future of EVs and Xiaomi plans to develop its own self-driving technology. The company expanded its R&D team in 2022 and is all set to mass-produce its cars in 2024. Recently, at the fifteenth annual meeting of the China Entrepreneurs Forum, Lei Jun confirmed that Xiaomi has no plans the release an electric vehicle for the next three to five years as it plans to focus on its existing products. Later, it was reported that the China-based smartphone maker could partner with China’s Great Wall Motor Co Ltd and use its factory for building its own electric car.