Chinse phone manufacturer Xiaomi Inc. is entering the electric vehicle business at a time that Apple Inc. continues to struggle to bring a car to market.
Often referred to as the Apple of China, Xiaomi may not be a well-known name in the U.S., but it surpassed Apple in July to become the second-largest smartphone maker in the world. That the “Apple of China” is now pursuing electric vehicles comes as no great surprise because although it doesn’t copy Apple’s designs, it has taken much of its inspiration from the company.
After Xiaomi initially said in March that it was looking at entering the market, it announced Xiaomi EV Inc. on Wednesday. The company has initial starting capital of RMB 10 billion ($1.5 billion), with Xioami co-founder and Chairman Lei Jun taking the position of chief executive officer.
The EV subsidiary will focus on making and developing vehicles and their parts and accessories. According to its registration, the company can also make electric motors, electric machines, electric signal equipment, lithium batteries and vehicle software.
Exactly which parts Xiaomi will make itself which they’ll have made under license, or which parts will be brought in from existing manufacturers is not known. Notably, the company visited and held talks with Changan Automobile Co. Ltd., SAIC Motor Corp. Ltd., Dongfeng Motor Corp., Trumpchi, SGMW, Great Wall Motors Co. Ltd., Robert Bosch GmbH and Contemporary Amperex Technology Co. Ltd., a mixture of carmakers and original equipment manufacturing parts suppliers.
Xiaomi is also well-known for using third-party suppliers to create many of the goods it takes to market outside of smartphones. The company sells everything from smart home lamps to KN95 face masks and even umbrellas.
Where some of the technology for the Xiaomi electric vehicle is coming from is already known. The company acquired autonomous driving company Deepmotion Inc. for $77.4 million in August. According to Pandaily, Deepmotion is a company run by former Microsoft Research Asia employees.
In June, Xiaomi was also the lead investor in a $300 million funding round into Lidar startup Hesai Technology Co. Ltd., while in July, Xiaomi led a round of RMB 400 million ($62 million) in Geometrical Perception and Learning Co. Ltd., a smart car supply chain company.
While Xiaomi forges ahead with its electric vehicle plans, Apple continues to struggle despite starting work on one in 2014. Exactly when an Apple car, if ever, may come to market is uncertain and likely not imminent. A report in January suggested that the car could take five to seven years to come to market.
Despite setbacks and times when Apple was seemingly walking away from the project, such as cutting staff in 2016, Apple is still pushing ahead.
Perhaps representative of its efforts, two Apple self-driving cars were involved in minor collisions in August. Macrumors reported last week that one accident Aug. 23 involved an Apple-powered test vehicle being rear-ended while stopped at traffic lights in Cupertino, California, right near Apple headquarters, while the other accident was also a rear-ender collision in San Diego Aug. 19.
That said, the fabled Apple car may not be as far away as some have suggested. Techstory said Apple has held discussions with Toyota Motor Co. and that manufacturing could start in Asia as soon as 2024. Apple was reported in February to have been in talks with Hyundai Motor Group affiliate Kia Corp.
Autoevolution, which pegs the launch date at 2025, suggests that Apple may have been involved in purchasing a former Chrysler testing track. The track, located in Phoenix, Arizona, was purchased for $125 million by Route 14 Investment Partners LLC, a company with no history in the automotive sector. The report suggests Apple may soon be ready to start actual prototype testing and hence needs a vehicle proving ground.
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