China is the leading electric vehicle (EV) user globally, thanks to governments’ policies to electrify the transport system to mitigate greenhouse gases’ effects. But government policies are not the only reason the Asian country has seen significant success in battery-powered vehicles’ rollout. The country’s manufacturing sector has played an essential role in providing EV options, from carmakers, telecom giants, and technology companies such as Baidu. On March 30, 2021, Xiaomi announced it was setting aside about $10 billion to join the race of making a battery-powered vehicle over the next decade.
The home electronics company is the world’s third-largest phone maker, after Apple and Samsung. In a Beijing-based firm statement, its goal is to “offer quality smart electric vehicles.” The venture is a risk on Xiaomi’s part, with the EV industry already flocked with various automakers, both international and local startups. American EV giant Tesla has begun preparing its Model 3 to enter the Chinese market through its Shanghai factory.
The firm will launch a daughter company to oversee its EV debut’s design, manufacture, and marketing. The company will use an initial investment of approximately $1.5 billion and be headed by Xiaomi’s current chief executive officer, Lei Jun. “The decision was made after numerous rounds of deliberation among all our partners, and this will be the final major entrepreneurial project of my life,” said Jun in a statement. It is not yet clear whether Xiaomi will produce budget models or go for the high-end versions.
The EV industry in China has attracted many companies, with some non-auto partners collaborating with carmakers to produce battery-powered cars jointly. For instance, search engine giant Baidu announced a collaboration with Geely to develop an EV. Geely, China’s biggest carmaker, will be in charge of the body works while Baidu will develop the car’s software.
Billionaire Jack Ma’s online market company, Alibaba, announced plans to partner with state-owned SAIC Motors to produce electric cars. Ride-hailing app Didi Chuxing is another internet sensation to venture into the green car industry. The company will partner with BYD Auto to make battery-powered cars used in the former’s ride-hailing business.
In China, the consumers have a range of EV options to choose from, with as low as $4,500. Geely is working on a new EV model, Zeekr, that will compete with Tesla’s most luxurious brand for the top seat. According to S&P Global Platts, a data provider, battery-powered vehicles will account for twenty percent of total new car sales in China by 2025.