Xiaomi’s $10 billion EV program struggles to gain support from Beijing
Xiaomi’s difficulty in obtaining a car manufacturing license in China, as reported by Bloomberg News, could hamper the development of its electric vehicle and postpone the planned 2024 debut. The delay could extend the drag of heavy R&D spending as well. than capital investment and could weigh on its market share as China’s electric vehicle segment becomes increasingly crowded with fast-growing rivals Nio, Xpeng and Li Auto.
China has stepped up scrutiny of the electric vehicle sector, after a scramble for the industry led to a string of high-profile bankruptcies. New EV applicants are asked to submit a series of documents to prove their financial and technological capabilities, and the review process can take months. The government also sometimes rejects applications, with companies then going back to square one with the regulatory process.
The lack of a car manufacturing license has had limited impact on Xiaomi’s electric vehicle development efforts so far, one of the people said. The EV division has more than 1,000 employees and Xiaomi has announced plans to mass-produce its first vehicle in 2024. It acquired land in the southeast suburbs of Beijing for an assembly plant and bought EV startups to add technology.
In early 2021, Lei pledged to invest around $10 billion over 10 years to manufacture Xiaomi-branded cars. The 52-year-old has largely withdrawn from the public eye to spend time on the EV project.
China’s electric car market is already crowded, with Tesla Inc., Nio and Warren Buffett-backed BYD among the biggest players. A growing number of tech companies, from Baidu Inc. to Huawei Technologies Co., are exploring business opportunities in self-driving, smart cockpit and power management technologies.