Xiaomi pledges $11.5 billion to electric vehicle business

Xiaomi’s announcement that it will enter the smart electric vehicle market has attracted considerable attention. Many have questioned whether one of China’s leading smartphone producers can seamlessly transition into the completely different EV market.

On March 30, Xiaomi announced that it will be setting up a subsidiary for Xiaomi cars under the leadership of CEO Lei Jun. The initial investment will be $1.5 billion and an additional $10 billion dollars have been pledged over the next ten years. 

Yesterday (April 6), Xiaomi held an ‘Open Day’ in which Lei Jun conducted a livestream about the company’s automotive plans. Lei stated that Xiaomi’s first car, which is expected to be launched in 3 years, will be the most cutting-edge product of its time. He also conducted a survey on Weibo asking netizens what they thought the first car should be:

  • 45% hope that Xiaomi’s first car is a sedan
  • 40% voted that they want it to be an SUV
  • Most users in the price range are expecting a price of 100,000 to 150,000 RMB

The hashtag ‘#Xiaomi electric car’ (#小米电动车) gained 110 million views on Weibo. Netizens were mixed in their response as to how Xiaomi should market the new subsidiary. Some approved of using Xiaomi’s existing brand name and logo (which has recently seen its update ridiculed online).

However, one netizen commented:

“Please don’t use Xiaomi’s brand logo and brand name. They need a better name because the smartphone market and car market target different consumer groups”.

Xiaomi has decided to expand into China’s EV market due to the growing demand for new energy vehicles. China’s State Council plans for the sales of new energy vehicles to represent 20% of total car sales by 2025.

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