Xiaomi Corp is facing difficulties obtaining regulatory approval for the electric vehicle project in China, an unexpected hurdle for the smart phone giant’s US$10bil (RM44. 49bil) carmaking practice.
The Beijing-based company has been speaking with officials at the National Development and Reform Commission about the licensing for months without achievement, according to people familiar with the matter.
Xiaomi is one of the later home owners entrants to a Chinese language EV sector currently teeming with rivals, including longer-established brands BYD Co plus Nio Inc. But billionaire co-founder Lei Jun, who has stated EVs will be their final startup practice, hopes Xiaomi’s experience in connected technology and building faithful user communities can translate in the world’s biggest EV market. But the longer the particular delay in securing a license, the bigger your head start its competitors will gain.
The smartphone plus electronics maker is pursuing new growth areas after logging its first sales decline on record in the first one fourth. While some Xiaomi professionals are hopeful the particular authority will eventually green-light the ELECTRONIC VEHICLES project, others worry the process will delay the company’s programs, said one of the individuals, who asked not to be named discussing internal matters. Xiaomi incorporated its EV subsidiary in Sept 2021, allowing the company to begin the application process.
Shares of Xiaomi fell as much as 5. 4% on Friday in Hong Kong. A company representative declined to comment. The NDRC didn’t instantly respond to a send seeking comment.
“Xiaomi’s difficulty within securing a carmaking license in The far east, as reported simply by Bloomberg News, can hinder its EV development and delay the debut planned for 2024. The particular delay could prolong the drag from hefty R& D expenses as well as fixed asset investments and might weigh on its market share as China’s EV segment is getting increasingly crowded along with fast-growing rivals Nio, Xpeng and Li Auto, ” stated Bloomberg Intelligence analysts Steven Tseng and Sean Chen.
China has been upgrading scrutiny of the ELECTRONIC VEHICLES sector, after a hurry into the industry led to a spate associated with high-profile bankruptcies. New EV applicants are asked to post a series of documents to prove their economic and technological capabilities, and the review process can take months. The federal government also sometimes rejects applications, with businesses then back on square one when it comes to the regulatory process.
The absence of a carmaking license has had limited effect on Xiaomi’s EV advancement efforts for now, stated one of the people. The particular EV division has more than 1, 000 employees and Xiaomi has said it plans to mass generate its first automobile in 2024. It has acquired land within the southeastern suburbs associated with Beijing for an set up plant, and purchased EV startups to include technology.
In early 2021, Lei pledged to invest about US$10bil (RM44. 49bil) over 10 years to make Xiaomi-branded cars. The 52-year-old has largely retreated from the public eyes to spend time around the EV project.
China’s electric car market is already crowded, with Tesla Inc, Nio and Warren Buffett-backed BYD one of the biggest players. A growing number of tech companies through Baidu Inc to Huawei Technologies Company are exploring business opportunities in autonomous traveling, smart cockpit and power management technologies. – Bloomberg