In a significant development, according to three sources familiar with the matter at hand, Xiaomi Corp plans on entering the electric vehicles (EVs) segment using Great Wall Motor Co Ltd’s factory, making it the latest tech firm to join the smart mobility race.
Xiaomi, one of China’s biggest smartphone makers, is in talks to use one of Great Wall’s plants in China to make EVs under its own brand, said two sources familiar the matter at hand on the condition of anonymity since the information is yet to be made public.
According to two sources, Xiaomi will aim its EVs at the mass market.
This will be the first time that Great Wall will offer manufacturing services to other companies and provide engineering consultancy to speed up the project.
Both companies are likely to announce a partnership as early as next week, said one of the sources.
Both, Xiaomi and Great Wall declined comment.
The development comes at a time when Xiaomi is looking to diversify its revenue streams from the smartphone business which accounts for the bulk of its income but carries razor-thin profit margins. Earlier this week on Wednesday, it flagged rising costs from a shortage in global chip supply and reported quarterly revenue below market estimates.
Earlier this year in January, Baidu Inc had said it plans to make EVs using an auto plant owned by Geely.
Xiaomi’s founder and CEO Lei Jun, believes the company’s expertise in hardware manufacturing will help accelerate the design and production of its EVs, said a source.
Along with smartphones, Xiaomi makes dozens of internet-connected devices including air purifiers, rice cookers and scooters.
Xiaomi plans on launching its first EV near around 2023, said a source while adding, it will enable its cars to connect with other devices in its product eco-system.
Great Wall, China’s biggest pickup truck maker, launched a standalone brand for electric and smart vehicles this year. It is also building an EV factory in China with Germany’s BMW AG.