Chinese smartphone giant Xiaomi plans to enter into electric vehicles (EV) business with US$10bn investment over the next 10 years. It’s a move that could boost competition in the segment, an analyst has told just-auto.
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, said the while Xiaomi’s entry will boost demand for EVs, may also be a concern for the traditional automakers as numbers of new entrants from the tech world pile up.
“The move follows the trail of competitors and tech companies such as Apple, Huawei, Sony and Foxconn,” Agwan says. “Apple and Huawei have plans to launch their EVs under their own brands and Xiaomi is likely to follow the same path. EV business will be operated under Xiaomi’s wholly owned subsidiary with an initial investment of US$1.5bn (RMB 10bn).”
Agwan notes that the merging boundaries between automotive tech, electronics and, information and communication technology companies are transforming the traditional automotive industry business model.
“Xiaomi will benefit from its experience in hardware-based Internet service, software and hardware integration, other core technologies and the manufacturing know-how,” he says. “Xiaomi’s wide footprint in China, the leading EV market globally, and its brand recognition and presence in other countries will also act in favor of the company.
Agwan adds: “With the EV market getting more competitive day-by-day with the entry of new players, automakers need to focus right positioned products and strategies to make themselves sustainable in the future EV market.”