Xiaomi and BAIC are negotiating the production of electric vehicles

Xiaomi Corp. is negotiating a strategic cooperation with one of the largest car manufacturers in China – Beijing Automotive Group Co. (BAIC). The goal is the joint production of electric vehicles. The agency reported Bloomberg citing sources familiar with the situation. Cooperation with BAIC will allow Xiaomi, according to the sources of the agency, to comply with its own plans to start producing electric vehicles in 2024.

On the entry into the electric vehicle market of Xiaomi, better known as one of the world leaders in the smartphone and smart device markets, stated back in March 2021. It was assumed that within ten years $ 10 billion would be invested in production. The priority of the direction was evidenced by the fact that the division for the production of electric vehicles was headed by the founder of the corporation, Lei Jun. In November of the same year, Mr. Lei announcedthat the first electric vehicles will be released in the first half of 2024.

All this time, a variety of rumors about Xiaomi’s electric car program have been circulating on the market. Someone talked about the company’s intention to produce electric vehicles on its own, someone said that Xiaomi’s program to enter the electric car market involves entering into a partnership agreement with one of the leading automotive brands. The transactions and arrangements carried out by the corporation could well be considered as confirmation of both one and the other version.

According to Bloomberg, Xiaomi has been having trouble fulfilling its plan to enter the electric car market due to delays in obtaining a license to manufacture cars on its own. These problems can be solved in cooperation with BAIC. Xiaomi and BAIC are discussing several options for such cooperation. In particular, the sources of the agency report a possible entry of Xiaomi into the capital of the second Hyundai plant in Beijing, owned by BAIC. It has all the necessary licenses for the production of cars. This plan, however, has a serious drawback: the plant is considered quite outdated, and its renovation requires serious investments. An alternative could be the production of co-branded electric vehicles based on BAIC’s own electric vehicle division, BAIC BluePark New Energy Technology Co., which has the necessary capacities.

Agency sources stressed that the negotiations are at an early stage and there are no guarantees that they will end with an agreement. Xiaomi declined to comment, while BAOC left a request for comment unanswered. However, on the back of the news, Xiaomi shares in Hong Kong rose by 3.3%. Even more energetically reacted the securities of companies associated with BAIC. Shares of BAIC Motor Corp, owned by the automotive group. in Hong Kong soared by 30.5%, while BAIC BluePark papers traded in Shanghai rose by the maximum allowed 10%.

Nikolai Zubov