Authorities in Beijing announced on Saturday that Chinese smartphone giant Xiaomi Corp will develop a plant in the city capable of producing 300,000 electric vehicles per year for its electric vehicle unit.
According to the government-backed economic development agency Beijing E-official Town’s WeChat account, the facility will be erected in two parts, and Xiaomi will also build its vehicle unit’s headquarters, sales, and research offices in the Beijing Economic and Technological Development Zone..
According to one source, Great Wall, which has never before supplied manufacturing services to other companies, would provide engineering consulting to help speed up the project.
Both companies expect to announce the alliance as soon as next week.
Great Wall and Xiaomi both declined to respond.
Xiaomi’s Chief Executive Lei Jun declared in October that the facility would reach commercial production in 2024. Beijing E-Town said it expected the plant to begin mass production in 2024.
Xiaomi announced in March that it would invest $10 billion over ten years in a new electric car segment. In late August, the corporation completed the business registration of its EV segment..
The move comes as Xiaomi, which has been around for eight years, looks to diversify its revenue streams away from the smartphone sector, which accounts for the majority of its sales but has razor-thin profit margins.
On Wednesday, it warned of growing costs due to a global chip scarcity and reported quarterly revenue that fell short of expectations.
The initiative also comes as manufacturers and tech companies collaborate more closely to produce smarter vehicles with features like smart interiors and autonomous driving.
Thousands of stores have been opened to boost domestic sales growth for the company’s smartphone business, but the corporation eventually aims to use these stores as a channel for its plans to sell electric automobiles.
Xiaomi’s electric vehicle branch will compete against Tesla and Xpeng. Because China is one of, if not the largest, markets for electric vehicles, it should do well there. If the corporation decides to sell its vehicles in other countries, it may or may not be successful.
It is recognized for its low costs, which may help them gain popularity, but it is a Chinese company, and China’s relations with Western countries are currently strained owing to a variety of political concerns.
Baidu Inc, a Chinese search engine company, announced in January that it planned to produce electric vehicles at a Geely-owned factory. Apple and Huawei Technologies’ respective vehicle ambitions were also reported by Reuters.