A well-loved smartphone maker is going into electric vehicles. Apple ? Not yet. China’s Xiaomi —the world’s third-largest smartphone maker—is barreling ahead into car making.
The Chinese electronics company said Tuesday that it will spend $10 billion over the next decade to enter the EV business, with an initial investment at around $1.5 billion. There are few details, but being new to car making, Xiaomi will likely find an outside partner to handle the manufacturing, while it focuses on design and engineering.
China’s search-engine giant Baidu is doing something similar: It has joined with Zhejiang Geely Holding Group, the parent of Volvo Cars, to make EVs. Apple was also looking for car-making partners, although its earlier talks with Hyundai Motors broke down. Such an outsourcing model is also used by some Chinese EV startups such as Nio .
But the project is clearly at the top of Xiaomi’s agenda. Its chief executive officer and founder, Lei Jun, will personally oversee what he said is the final major entrepreneurial project of his life. And it is clearly aimed at taking advantage of the recent frenzy in EV stocks: Baidu’s shares, for example, surged this year before recently being sold down in the Archegos debacle.
It is also a bet that cars will become more like giant smartphones. If autos become a combination of software and hardware, then technology companies will have an edge designing cars that appeal to consumers, compared with traditional auto makers. Full self-driving cars are the holy grail of such an evolution, though that is likely still years away.
