In a pivotal stride towards its foray into the automotive industry, Xiaomi has secured crucial approval from key regulatory bodies to commence the production of 100,000 vehicles annually. This green light from the National Development and Reform Commission (NDRC) represents a noteworthy advancement for the tech giant’s ambitious venture into electric vehicle manufacturing.
While this approval signifies a significant step forward, Xiaomi’s electric cars still need the endorsement of the Ministry of Industry and Information Technology, which rigorously assesses technical and safety aspects before granting its consent.
Xiaomi’s founder, Lei Jun, unveiled the company’s entrance into the smart electric vehicle market in 2021. Pledging an impressive $10 billion investment over the span of ten years, Lei Jun set an ambitious target of commencing mass production of the inaugural batch of vehicles by the first half of 2024.
Amid an 18.9% year-on-year decline in first-quarter revenue, Xiaomi’s bold foray into the electric vehicle (EV) market comes as a strategic response to diversify its business beyond the smartphone sector. With smartphone demand facing a slump, the tech giant aims to leverage its extensive network of stores, planning to transform them into EV showrooms.
However, the realization of this timeline remains contingent on the progress of regulatory approvals. Comparable challenges are evident even in established companies: Tesla’s application to expand its Shanghai facility is pending approval, while the prospects for U.S. luxury electric automaker Lucid Group to commence production in China appear uncertain.
The NDRC’s cautious approach in approving new electric vehicle production plans stems from concerns about potential overcapacity and a deceleration in demand within the sector. This cautious stance has led to meticulous evaluations of each proposal to ensure a balanced market.
Xiaomi’s founder, Lei Jun, revealed that the EV venture will mark his final major entrepreneurial endeavor. In a recent Weibo post, Lei Jun shared images of Xiaomi Group executives, including partner and president Lu Weibing, displaying banners adorned with the rallying slogan, “Championing Xiaomi Cars.”
This move underscores Xiaomi’s determination to reshape its business landscape and establish a stronger foothold in the ever-evolving automotive industry. As the company confronts challenges in its traditional market, its entry into EVs showcases a resolute commitment to innovation and adaptation.
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