The electric vehicle market in China is saturated with players and highly competitive, so the desire of electronics manufacturer Xiaomi to enter this segment came as a surprise to many. The company’s founder, Lei Jun, admitted during his recent speech that he was prompted to take such a step by the threat of American sanctions against Xiaomi.
Image source: Xiaomi
As the South China Morning Post explains, citing statements by Lei Jun, in the last days of the administration of former US President Donald Trump, Xiaomi was blacklisted by the US Department of Commerce. This happened in January 2021, and four months later Xiaomi managed to challenge and reverse this decision in court, which in itself is a unique precedent for a Chinese company. Two months after Xiaomi was included in the sanctions list, the company’s founder decided to announce his intentions to enter the electric vehicle market. According to him, it was the threat of US sanctions that almost destroyed Huawei’s smartphone business that pushed him to take this step.
It was difficult to count on attracting third-party capital in the face of looming sanctions, so the company’s founder decided to invest his own funds in the development of Xiaomi’s electric mobility business. Over ten years, he plans to spend approximately $10 billion on these needs; this will be “the last big entrepreneurial project in his life,” as Lei Jun admitted. Of this amount, $756 million has already been spent on the construction of a plant in Beijing, which is currently producing SU7 electric vehicles. Let us remember that Xiaomi initially used a BAIC license to release them, but recently received its own.
Speaking about plans for the near future, Lei Jun confirmed Xiaomi’s readiness to reach annual production volumes of 100,000 electric vehicles by November of this year, and by the end of the whole year the milestone of 120,000 cars produced annually will be reached. In June, the company’s Beijing plant launched a second shift to produce SU7 electric vehicles. Since the launch of sales in the spring of this year, the company has already been able to deliver more than 30,000 cars to its customers.