Although Xiaomi has made a name for itself in the smartphone market, they also manufacture home appliances, lifestyle products, and even personal transport. And according to 6Park, the Xiaomi Group has plans to expand their transport catalog to include an electronic car.
The details are still hazy and Xiaomi is evaluating the feasibility of the project, so there aren’t any concrete plans or wheels in motion just yet. But the news alone was enough to raise Xiaomi’s stocks by 6-11%.
Over the years, Xiaomi has invested in the automobile industry in China, so it’s more likely that Xiaomi will manufacture the car through the acquisition of a company. Plus, Xiaomi doesn’t have the foundry system needed to build a car from scratch.
Do note that while Xiaomi might consider breaking into the smart car industry, we won’t be seeing a Xiaomi car anytime in the near future. Sources with knowledge of the matter say Xiaomi doesn’t have any urgent reason to develop a car.
Firstly, among the ongoing decline of Huawei sales, Xiaomi has plenty of room for growth, both in their domestic market and in Europe. It’s critical because the global smartphone market is stagnating.
Second, Xiaomi doesn’t have the industry ‘experience’ in the field of self-driving vehicles. And lastly, the competition is already too fierce. Even without considering the Teslas of the world, traditional automobile giants like Volkswagen and Toyota have already covered a lot of ground. Plus, new electric car manufacturers in China have the lead.
That said, the smart vehicle business is booming. In just last year, Tesla’s market share grew seven times. And Xiaomi has not only invested in that market, but its co-founder Lei Jun met with Tesla CEO Elon Musk twice in 2013. Challenging as it might be, venturing into this burgeoning market won’t be out of character for Xiaomi.