It looks like Xiaomi is set to shake up the automotive market
Xiaomi, a Chinese electronic company, most famous for its smartphones just won the approval to produce electric vehicles (EVs). According to sources in the know, Xiaomi received this approval from China’s state planner. This is a significant step towards the brand’s goal of producing cars by the beginning of next year.
According to the sources, the National Development and Reform Commission (NDRC), which regulates new investments and production capacity in China’s car industry, had approved Beijing-based Xiaomi’s objective to produce EVs earlier this month.
Moreover, this approval brings Xiaomi closer to mass producing EVs almost two years after it first revealed its plans to do so. The venture is still in the process of clearance from the Ministry of Industry and Information (MIIT), which is evaluating and accessing new models and ventures for technical and safety requirements.
This, unfortunately, also means that Xiaomi would be joining the Chinese car manufacturing sector, which is already facing several issues, including a capacity glut and slowing demand which sparked the infamous price wars that American EV brand, Tesla, started in China and hit supplier margins in the country.
Xiaomi also promises a USD10 billion (RM46,435,000,000) investment over a decade in the automotive industry and aims to mass-produce its first cars in the first quarter of 2024, but will the brand be able to make good on this?
Keep in mind, there are some glitches that the NRDC may not be able to approve for new EV manufacturing plans of companies because there are concerns about overcapacity and falling demand in the market which leaves many concerns associated with meeting the deadlines.
On top of that, according to the aforementioned sources, Tesla also plans to expand its Shanghai plant which has yet to receive approval. Industry sources recently also confirmed that U.S. luxury EV maker, Lucid Group, is willing to produce cars in China.
However, with market demand being low, it is still being determined why NRDC granted approval to Xiaomi. The Beijing municipal government marks its EV plant as an essential industrial government project. The NDRC and MIIT also did not comment on this.
The sources declined to be named and according to them, Xiaomi moved through with the project as it awaited approvals, compiling plant facilities in Beijing capable of producing 200,000 EVs annually. The brand also plans to produce about 100,000 EVs next year and has been planning to hire workers since last week as well.
We got all this from Techjuice and their full article is linked here. Thank you Techjuice for the information.
