HONG KONG v. BEIJING (Reuters) – China’s Xiaomi Corp. plans to produce electric vehicles (EVs) using Great Wall Motor Co Ltd’s factory, said three people with direct knowledge of the subject, becoming the latest technology company to join. smart mobility race.
The technology company’s stock price rose more than 9 percent in Friday afternoon’s trading after Reuters reported the plan. Shares in Hong Kong of the Great Wall rose by more than 15%, and its shares in Shanghai gained with a daily maximum of 10%.
Xiaomi, one of the world’s largest smartphone makers, is in talks to use one of China’s Great Wall factories to produce electric vehicles under its own brand, said two of the people, who declined to be identified. because the information is not public.
Xiaomi will target its electric vehicles to the mass market, in line with the broader positioning of its electronic products, the two said.
The Great Wall, which has so far not provided production services to other companies, will provide engineering consultancy to speed up the project, one of the people said.
Both companies plan to announce the partnership early next week, another person said.
Xiaomi and the Great Wall declined to comment.
SMARTER VEHICLES
The plan comes as Xiaomi tries to diversify its revenue streams from its smartphone business, which accounts for most of its revenue but has thin profit margins. It marked rising costs on Wednesday due to the global shortage of chips and reported quarterly revenue below market estimates.
The measure also comes against the backdrop of carmakers and technology companies working closer together to develop smarter vehicles with technology such as smart cabs and autonomous driving.
Chinese search engine supplier Baidu Inc. said in January that it plans to produce electric vehicles using a car factory owned by Geely – an automaker with aspirations to offer engineering and contract manufacturing consultancy.
Reuters also reported the car ambitions of Apple Inc. and Huawei Technologies Co Ltd.
Xiaomi founder and CEO Lei Jun believes the company’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 automaker that offers model infrastructure, allowing its own advantages in mobile internet technology,” said Alan Kang, senior analyst at LMC Automotive.
“Xiaomi’s advantages in operating systems and home furnishings also bring a lot of imagination to such cooperation in the future.”
In addition to smartphones, Xiaomi produces dozens of internet-connected devices, including scooters, air purifiers and rice cookers.
One person said the company plans to launch its first EV around 2023. It will allow cars to connect with other devices in the product ecosystem, people said.
The Great Wall of Baoding, China’s largest truckmaker, launched an independent brand of electric and intelligent vehicles this year. It is also building an electric vehicle factory in China with BMW AG in Germany.
The automaker sold 1.11 million vehicles last year, helped by the popularity of models such as the P-series truck and the EV Hour. It is currently building its first factory in Thailand.
Reporting by Julie Zhu and Yilei Sun; Edited by Christopher Cushing