Chinese phone maker Xiaomi is wading into electric vehicles business with a $10bn (£7.3bn) investment over ten years.
The Chinese tech giant’s goal is to “offer quality smart electric vehicles,” it said on Tuesday.
Xiaomi is the world’s third largest smartphone maker behind Apple and Samsung, according to data firm Canalys.
The company will be entering a fiercely competitive electric car market that also includes rivals Apple and Huawei.
Smartphone giant Xiaomi on Tuesday announced that it is entering the electric vehicle business. The company will operate a wholly-owned subsidiary to operate the electric vehicle business. The company estimates the eventual investment in the company in the next 10 years to reach $10 billion.
The Chinese giant expects the initial phase of investment to be RMB 10 billion. Xiaomi CEO Lei Jun will serve as the CEO of the electric vehicle business, stated the company.
“The board of directors of the company has resolved to commence the electric vehicle business. The company will set up a wholly-owned subsidiary to operate the smart electric vehicle business. The initial phase of investment will be RMB 10 billion, with the total investment amount over the course of the next 10 years estimated to be USD$10 billion. Mr Lei Jun, the Chief Operating Officer of the group will concurrently serve as the Chief Operating Officer of the smart electric vehicle business,” said the company in an announcement to shareholders and potential investors.
“Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere,” said the company.
Further details about the business is expected to be revealed at the Xiaomi Mega Launch Part II on Tuesday evening. The company launched the M 11 series lineup in Part I of the launch event. Xiaomi is expected to launch the Mi Mix Fold, the company’s first folding phone in the second part of the launch event.
In the first part of the event, the company launched the M11 Ultra, Mi 11i, Mi 11 Lite 5G and Mi 11 Lite, Mi Smart Band 6, and Mi Smart Projector 2 Pro.
Other Chinese technology companies have also signalled their intention to make cars, or to partner with existing carmakers to produce new driving technologies.
Search engine giant Baidu announced in January it would also launch an electric car business.
China’s e-commerce giant Alibaba has formed an EV joint venture with SAIC, while ride-hailing app Didi Chuxing has partnered with automaker BYD to make electric vehicles specifically designed for its services.
Data provider S&P Global Platts estimates that “new energy vehicles” will account for 20% of total new car sales in China by 2025.