HONG KONG / BEIJING (Reuters) – China’s Xiaomi Corp plans to make electric vehicles (EVs) using the Great Wall Motor Co Ltd factory, said three people with direct knowledge of the matter, making it the latest technology company to enter in the race for smart mobility.
The technology company’s stock price rose more than 9% in Friday afternoon’s trading after Reuters released the plan. The Hong Kong shares of Great Wall were up more than 15% and Shanghai shares appreciated at their maximum daily limit of 10%.
Xiaomi, one of the world’s largest smartphone makers, is in talks to use one of the Great Wall factories in China to make EVs under its own brand, said two people, who declined to be identified because the information is not public.
Xiaomi will target its EVs to the mass market, in line with the broader positioning of its electronics, the two people said.
Great Wall, which previously did not offer manufacturing services to other companies, will provide engineering consultancy to streamline the project, one person said.
The two companies plan to announce the partnership as early as next week, someone else said.
Xiaomi and Great Wall declined to comment.
SMART VEHICLES
The plan comes at a time when Xiaomi seeks to diversify its revenue streams from the smartphone business, which accounts for most of its revenue, but brings minimal profit margins. She signaled on Wednesday the rising costs of a global chip shortage and reported quarterly revenue below market estimates.
The change also has as a backdrop the automakers and technology companies working together to develop smarter vehicles with technology, such as smart cabs and autonomous driving.
Chinese search engine provider Baidu Inc. said in January that it plans to make EVs using a car factory owned by Geely – an automaker with aspirations to offer engineering and contract manufacturing consultancy.
Reuters also reported on the respective automotive ambitions of Apple Inc and Huawei Technologies Co Ltd.
Xiaomi’s founder and chief executive, Lei Jun, believes that the company’s experience in the manufacture of hardware will help speed up the design and production of its EVs, one of the people said.
“Xiaomi wants to find a mature car manufacturer to provide model infrastructure, enabling its own advantages in mobile internet technology,” said Alan Kang, senior analyst at LMC Automotive.
“Xiaomi’s advantages in home operating and mobile systems also bring a lot of imagination to this cooperation in the future.”
In addition to smartphones, Xiaomi manufactures dozens of devices connected to the Internet, including scooters, air fresheners and rice cookers.
The company plans to launch its first EV around 2023, one person said. It will allow your cars to connect to other devices in your product ecosystem, people said.
Great Wall, based in Baoding, China’s largest pickup truck manufacturer, launched an independent brand for electric and smart vehicles this year. It is also building an EV factory in China with Germany’s BMW AG.
The automaker sold 1.11 million vehicles last year, helped by the popularity of models such as the P-series pickup and Ora EVs. He is currently building his first factory in Thailand.
Julie Zhu and Yilei Sun reporting; Christopher Cushing’s Edition