- Chinese tech giant Xiaomi has purchased a 53-hectare plot of land in Beijing for $116 million to expand its electric vehicle production.
- Xiaomi secured an independent car manufacturing licence, which means the company is no longer required to utilise the permit of state-owned BAIC Motor Corporation.
OUR TAKE
Xiaomi’s acquisition of a substantial plot of land in Beijing for EV development underscores its commitment to becoming a significant player in the automotive sector. Securing an independent car manufacturing licence and achieving strong sales figures highlight Xiaomi’s agility and adaptability. This move, amidst a challenging market and the decline of some competitors, demonstrates Xiaomi’s potential to drive innovation and growth in the EV market.
–Vicky Wu, BTW reporter
What happened
Chinese technology giant Xiaomi Corporation has acquired a 53-hectare (131-acre) plot of land in Beijing for $116 million. According to filings published by the Beijing Municipal Commission of Planning and Natural Resources, the land, located near Xiaomi’s existing electric vehicle (EV) factory in the Yizhuang district, will be used for the development of high-end automobiles and new energy intelligent vehicles. The purchase was made by Xiaomi’s subsidiary, Xiaomi Jingxi Technology Ltd.
Xiaomi entered the automotive sector in March with the launch of its base model SU7 sedan, priced at 215,900 yuan. The company has already delivered 30,000 vehicles and is on track to reach its initial target of 100,000 sales by November, ahead of schedule. Xiaomi’s CEO, Lei Jun, has outlined a $10 billion investment plan to establish the company as a significant player in the EV market. In July, Xiaomi secured an independent car manufacturing licence, which means the company is no longer required to utilise the permit of state-owned BAIC Motor Corporation.
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Why it’s important
Xiaomi’s expansion into EV production marks a strategic move by the tech giant to diversify its business portfolio and tap into the rapidly growing electric vehicle market. Despite the phasing out of national subsidies for EV purchases in 2022 and a challenging market landscape, Xiaomi has achieved notable success. Its entry into the EV sector contrasts with the struggles faced by some competitors, such as WM Motor and Human Horizons’ HiPhi brand, which have either gone bankrupt or halted production.
The acquisition of the new land signals Xiaomi’s commitment to becoming a major force in the EV industry. The company plans to begin production of a sport utility vehicle (SUV) similar to Tesla’s Model Y as early as 2025, with the second phase of its car factory construction scheduled for completion in the same year. Xiaomi’s first phase of the factory currently has an annual production capacity of 150,000 cars.
Xiaomi’s rapid progress in the EV market, combined with its recent attainment of an independent car manufacturing qualification, positions the company for continued growth and innovation in the automotive sector. The move is significant as it underscores the ongoing transformation of China’s automotive industry, driven by technological advancements and ambitious domestic players.
