Chinese smartphone maker Xiaomi plans to make EVs using Great Wall Motor’s factories

A "MI" logo stands outside the main entrance of the Xiaomi Corp. headquarters in Beijing, China. Photographer: Edmond Lococo/Bloomberg

China’s Xiaomi Corp. plans to make electric vehicles (EVs) using Great Wall Motor Co Ltd’s factory, said three people with direct knowledge of the matter, making it the latest tech firm to join the smart mobility race.

The tech firm’s stock price was up more than 9% in afternoon Friday trade after Reuters reported the plan. Great Wall’s Hong Kong stock rose more than 15% and its Shanghai shares gained by their maximum 10% daily limit.

Xiaomi, one of the world’s biggest smartphone makers, is in talks to use one of Great Wall’s plants in China to make EVs under its own brand, said two of the people, who declined to be identified as the information is not public.

Xiaomi will aim its EVs at the mass market, in line with the broader positioning of its electronics products, the two people said.

Great Wall, which has not before offered manufacturing services to other companies, will provide engineering consultancy to speed up the project, said one of the people.

Both companies plan to announce the partnership as soon as early next week, said another person.

Xiaomi and Great Wall declined to comment.

Smarter Vehicles

The plan comes as Xiaomi seeks to diversify its revenue streams from the smartphone business which accounts for the bulk of its income but carries razor-thin profit margins. It flagged on Wednesday rising costs from a global chip shortage and reported quarterly revenue below market estimates.

The move also comes against the backdrop of automakers and tech firms working closer together to develop smarter vehicles with technology such as smart cabins and autonomous driving.

Chinese search engine provider Baidu Inc said in January it plans to make EVs using an auto plant owned by Geely – an automaker with aspirations to offer engineering consultancy and contract manufacturing.

Reuters has also reported Apple Inc and Huawei Technologies Co Ltd’s respective auto ambitions.

Xiaomi‘s founder and chief executive, Lei Jun, believes the firm’s expertise in hardware manufacturing will help accelerate the design and production of its EVs, one of the people said.

Xiaomi wants to find a mature automobile manufacturer to provide model infrastructure, enabling its own advantages in mobile internet technology,” said Alan Kang, senior analyst at LMC Automotive.

Xiaomi‘s advantages in operating systems and home furnishing also bring a lot of imagination for such cooperation in the future.”

Alongside smartphones, Xiaomi makes dozens of internet-connected devices including scooters, air purifiers and rice cookers.

The firm plans to launch its first EV around 2023, one of the people said. It will enable its cars to connect with other devices in its product eco-system, the people said.

Baoding-based Great Wall, China’s biggest pickup truck maker, this year launched a standalone brand for electric and smart vehicles. It is also building an EV factory in China with Germany’s BMW AG.

The automaker sold 1.11 million vehicles last year helped by the popularity of models such as the P-series pickup truck and Ora EVs. It is currently building its first factory in Thailand.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.