(ATF) China’s Xiaomi Corp plans to make electric vehicles (EVs) using Great Wall Motor Co Ltd’s factory, sources have revealed, making it the latest tech firm to join the smart mobility race.
The tech firm’s stock price jumped as much as 6.7% in early Friday trade after Reuters reported the plan. Great Wall’s Hong Kong stock rose more than 8% and its Shanghai shares gained than more than 7%.
Xiaomi, one of the world’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 of the people, who declined to be identified as the information is not public.
Xiaomi will aim its EVs at the mass market, in line with the broader positioning of its electronics products, the two people said.
Great Wall, which has not before offered manufacturing services to other companies, will provide engineering consultancy to speed up the project, one of the people said.
Both companies plan to announce the partnership as soon as early next week, one said.
Xiaomi and Great Wall declined to comment.
Rising chip costs
The plan comes as eight-year-old Xiaomi seeks to diversify its revenue streams from the smartphone business which accounts for the bulk of its income but carries razor-thin profit margins. It flagged on Wednesday rising costs from a global chip shortage and reported quarterly revenue below market estimates.
The move also comes against the backdrop of automakers and tech firms working closer together to develop smarter vehicles with technology such as “smart” cabins and autonomous driving.
Chinese search engine provider Baidu said in January it plans to make EVs using an auto plant owned by Geely – an automaker with aspirations to offer engineering consultancy and contract manufacturing.
US tech giant Apple and and China’s Huawei Technologies have also been reviewing their auto options.
Xiaomi’s founder and chief executive, Lei Jun, believes the firm’s expertise in hardware manufacturing will help accelerate the design and production of its EVs, one of the people said.
Alongside smartphones, Xiaomi makes dozens of internet-connected devices including scooters, air purifiers and rice cookers.
The firm plans to launch its first EV around 2023, one of the people said. It will enable its cars to connect with other devices in its product eco-system, the people said.
Baoding-based Great Wall, China’s biggest pickup maker, this year launched a standalone brand for electric and smart vehicles. It is also building an EV factory in China with Germany’s BMW AG.
The automaker sold 1.11 million vehicles last year helped by the popularity of models such as the P-series pickup truck and Ora EVs. It is currently building its first factory in Thailand.
With reporting by Reuters
The Global Green Energy Transport and Technology Leaders Index created by Asia Times Financial in collaboration with ALLINDEX, is a benchmark that tracks shares of leaders in electric vehicle and renewable energy production and storage businesses.
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