Our favorite Chinese tech giant Xiaomi is well on its way to the final of its long-awaited electric car. Its production has already been approved by the Chinese government.
The Chinese government approved the production
Xiaomi's ecosystem is really powerful, especially in the domestic, Chinese market. It includes dozens of partner manufacturers, hundreds or even thousands of products, but one key element is still missing. A car, or electric car as part of the Xiaomi product family.
This very product may soon become a reality. The Chinese manufacturer secured essential approvals from key regulatory authorities to start production in a quota of 100 vehicles per year. Approval from National Commission for Development and Reform (hereinafter referred to as NDRC) represents a remarkable advance in the production of Xiaomi electric vehicles.
Although this approval marks a significant step forward, electric cars from Xiaomi they still need the approval of the Ministry of Industry and Information Technology, which rigorously assesses the technical and safety aspects of the vehicle before granting approval.
Lei Jun, The CEO of Xiaomi revealed plans for an electric vehicle as early as 2021. He also promised an impressive investment of $10 billion over the next ten years and set an ambitious goal to start mass production of the initial series of vehicles in the first half of 2024.
Diversification of the portfolio and upliftment of the Xiaomi Group
Xiaomi's bold entry into the electric vehicle market comes amid a year-on-year decline in first-quarter sales. Especially as a strategic response to the diversification of the brand's business outside of the smartphone or tablet market.
And as demand for smartphones faces a slump, the tech giant is looking to leverage its vast network of brick-and-mortar stores. He plans to turn them into showrooms with electric vehicles. The move also underlines Xiaomi's determination to reshape its business landscape and establish a stronger position in the ever-evolving automotive industry.
However, the implementation of these plans is conditional on progress in the approval of the regulatory authorities. Comparable challenges are also evident in established companies. For example Tesla's request to expand its Shanghai factory is still awaiting approval, while US luxury electric car maker Lucid Group's prospects for starting production in China still appear uncertain.
The NDRC's cautious approach in approving new electric vehicle production plans stems from concerns about potential overcapacity and a slowdown in demand in the sector. This cautious attitude has led to careful evaluations of each proposal in order to ensure a balanced market for the production of electric vehicles.
In a recent post, Lei Jun also revealed that the electric vehicle segment will be his last major business venture. He also shared pictures of other Xiaomi Group executives. Including partner and company president Lu Weibing. These are complemented by the slogan "Championing Xiaomi Cars". However, we do not have any further information about this event yet.
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