- Smartphone giant has had discussions with Brilliance, Chery
- Beijing has tightened approval processes around EV production
Xiaomi Corp. has held talks with established automakers on potential production partnerships, people familiar with the matter said, as it waits for Beijing to approve a license that would give it the right to manufacture electric cars itself.
The Chinese smartphone giant, which has ambitions of becoming a producer of its own brand of electric vehicles, has engaged with several carmakers including Brilliance Auto Group Holdings Co. and Chery Automobile Co., the people said, asked not to be identified because the discussions are private.
Xiaomi has also held talks with Beijing Automotive Group Co. on potential collaboration around producing EVs, Bloomberg reported in August last year.
Xiaomi’s casting of a wider net comes as China seeks to limit the number of EV production licenses as the nation’s new-energy vehicle market matures. After growing at a breakneck pace via years of generous subsidies, the EV sector is plateauing somewhat and existing players are slashing prices to spur consumer demand. That’s seen aspiring market entrants be pushed into partnerships with licensed manufacturers, or pivot their business plans entirely.
Read more: China’s Push to Cool EV Growth Is Upending Big Tech’s Ambitions
Xiaomi declined to comment. Representatives from Brilliance Auto and Chery didn’t respond to calls and emailed requests for comment.
Meantime, Xiaomi is still working to obtain the relevant approvals from the Ministry of Industry and Information Technology, which signs off on EV production, the people said. Deliberations with other automakers are ongoing and there’s no certainty any partnerships will materialize, they added.
Xiaomi’s co-founder Lei Jun has pledged to invest around $10 billion in making EVs a reality for the technology group and still hopes to debut its first electric car next year. Bloomberg Intelligence said last month that the company’s EV push could be a drag on profit over the next two years with a less than 5% sales contribution.
Through cost-cutting efforts Xiaomi managed to report better-than-expected net income of 3.67 billion yuan ($503 million) in the three months ended June, above the average estimate of 3.16 billion yuan. Revenue slid by 4% to 67.4 billion yuan.
