Xiaomi clarifies reports that it plans to build electric cars
Chinese smartphone maker Xiaomi has officially clarified, though not explicitly denied, reports of its entry into the car-making industry.
In an announcement filed with the Hong Kong Stock Exchange Sunday evening, Xiaomi said it noted recent media reports about its plans to enter the electric vehicle manufacturing industry, but that "the Group's research on the electric vehicle manufacturing business has not yet reached the stage of formally setting up the project."
"The Group has been following the development of the electric vehicle ecology and has been conducting continuous assessment and research on the relevant industry dynamics," the announcement said.
Chinese media outlet LatePost said Friday, citing multiple sources, that Xiaomi has decided it will build a car and sees it as a strategic-level decision.
The exact form and path for Xiaomi to build a car has not yet been determined and may still be subject to change, the report said.
The report cites a person familiar with the matter as saying that Xiaomi's project to build a car will likely be handled by Xiaomi Group founder Lei Jun himself.
Lei, who visited Tesla CEO Elon Musk twice in 2013 in the U.S., wrote on his WeChat account that he was curious about Tesla, whose market value had risen sevenfold to more than $20 billion a year at the time, and the smart electric car industry in which it operates.
Now Xiaomi is among the top three in the world in the smartphone industry, but at the same time, global cell phone sales growth has stagnated.
The most popular sector in the market today is smart electric vehicles, and the report says that NIO, for example, a six-year-old investment by Lei's Shunwei Capital, currently has a market capitalization of $85.6 billion, only about 6 percent less than Xiaomi's $91.1 billion.
Xiaomi responded to the Securities Times on Friday, saying, "No comment for now, please wait for the company announcement."
(A screenshot of Xiaomi's announcement)
(Source: Xiaomi website)