Chinese smartphone giant Xiaomi plans to invest about 100 billion yuan ($15 billion) over the next three years to produce electric cars, Bloomberg said Tuesday, citing people familiar with the matter.
Xiaomi will invest about 60 percent of the amount envisioned and plans to finance the rest, the person familiar with the matter said.
Xiaomi has less than 100 billion yuan in cash and cash equivalents as of the end of 2020.
Xiaomi will outsource car assembly to contract manufacturers, the same model used for its smartphones, the person familiar with the matter said.
Xiaomi is fast-tracking the car-making matter, with projects expected to be set up as soon as 1-2 months, 36kr.com learned earlier this month from sources close to the company's founder Lei Jun, including investors and car company executives.
Xiaomi's initial discussions on brand positioning are similar to XPeng Motors, focusing on the mid- to high-end market with strong technology attributes, the 36kr report said.
In late February, Lei had an appointment with NIO Motors founder Li Bin to consult on a car build, the report said.
The immediate person in charge of the plan is Wang Chuan, co-founder, and chief strategy officer of Xiaomi, who was at the helm of Xiaomi TV, considered to be one of Xiaomi's most successful businesses outside of cell phones, according to the report.
Other industry sources close to Lei said that "as soon as this month or next month, a Xiaomi car build could be set up."
"It's almost an internal consensus that the head of Xiaomi's car build is Wang." 36kr.com quoted the source as saying.
A car company executive also said, "Wang visited Li Auto often in the last year, and if the No. 1 person in charge of Xiaomi's car build is Lei, the No. 2 person in charge is Wang."
Wang joined Xiaomi in 2012 and has been in charge of TV department, staff department, China region, and large appliances department, and has participated in the whole chain of product development, production, channels, and sales.
Wang has been Lei's business partner and close friend for many years, and according to media reports, Lei once told Wang: I support whatever you do.
Wang is studying the automotive industry on behalf of the Xiaomi Group, seeking various resources such as talent, technology and factory manufacturing, the report said.
On the talent side, Wang is already in contact with some quality executives in the auto industry, seeking CEO candidates for auto companies.
But the source also revealed that the plan has not yet been finalized and does not rule out ending up with one of Xiaomi's own executives as CEO.