Xiaomi finally announced its EV project

In the end of March, 2021, several media including BBC reported that Xiaomi will produce its electric vehicles.

Chinese phone maker Xiaomi will enter the electric vehicle market. In fact, the company is going to invest in $10bn over ten years. The Chinese tech giant sets its goal to “offer quality smart electric vehicles”. In 2020, Xiaomi became the world’s third largest smartphone maker behind Apple and Samsung. In addition, there are rumors that its smartphone rivals Apple and Huawei also enter the EV market, too.

Xiaomi’s chief executive Lei Jun mentioned as follow. “The decision was made after numerous rounds of deliberation among all our partners. This will be the final major entrepreneurial project of my life.”

Now, the company has not shared any information about whether it will produce budget models or top end products. There are already hundreds of companies in China competing for a share of the world’s leading market for electric cars.

Who is Xiaomi?

Xiaomi Corporation is a Chinese multinational electronics company and it was founded in April 2010. The head office is in Haidian District, Beijing, China. Xiaomi offers software with smartphones and smart hardware connected by the Internet of Things (IoT) platform at its core. The corporate vision is to be friends with Xiaomi’s users, and to be the “coolest company” among them.

Xiaomi always tries to innovate through the quality and efficiency of its products as well as services. In fact, the company makes high quality products available so that everyone can experience his/her better life through innovative technology.

Xiaomi has sold more than 213.2 million smart devices (excluding smartphones and laptops) connected to its platform. Furthermore, the company has established the world’s largest consumer IoT platform. In 2021, Xiaomi’s products are present in more than 90 countries and regions across the globe.

Why do smartphone makers consider entering the market?

Our media has already discussed the potential Xiaomi’s Mi Car Project in March, 2021. At that time, the company told that there was no EV project yet. However, the proverb, “there is no smoke without fire”, is true for this case. Xiaomi finally shared its intention to enter the EV market and will invest $10bn in the next 10 years. What we can learn from this decision?

More electronics companies will enter the market

First of all, other largest smartphone makers including Apple and Huawei also possibly enter the EV market. What’s more, the largest iPhone supplier, Foxconn, will offer MIH, which is EV open platform, to other electronics companies. Therefore, not only smartphone manufacturers but also their suppliers cannot ignore the EV market. Or we can safely say that EVs are next important revenue source for hardware companies.

Huge investments

The number, $10bn investments, is huge. How many companies in the world can invest in this amount of money for ten years? It means that companies should earn enough money in their existing businesses to invest in new businesses. Thus, small and medium companies (SMEs) have to think their strategy to keep up with this rapid changing business environment. This is because SMEs have weaker earning power than big companies such as Xiaomi, Apple and Foxconn.

In the end, we can expect final decision of Apple or Huawei that enter the EV market as well. If you want to know the investment relating to EVs, you can see Bankrate’s report.