Xiaomi

The analysts said Xiaomi has strong supply chain management and cost control capabilities and will launch a very cost-effective model.

Xpeng Motors CEO He Xiaopeng took to Weibo on March 31 to welcome Xiaomi as a peer, after the smartphone giant officially announced its entry into China's increasingly crowded car-making industry.

Xiaomi's car business could launch a product as soon as three years from now, the Chinese smartphone giant’s founder and CEO Lei Jun said in a March 30 interview with CCTV.

"This is the last major venture of my life. I am willing to bet my entire reputation in life to personally lead the team for Xiaomi cars."

A previously departed Nio executive said he was approached by the Xiaomi team after the Chinese Lunar New Year this year to talk about building cars and asked for recommendations.

The company's initial investment will be 10 billion yuan ($1.5 billion), with an expected investment of $10 billion over the next 10 years.

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 yet to officially announce its intention to start building cars, the trademark for "Xiaomi Motors" has been registered by another company.

Earlier today, it was reported that Xiaomi was in talks with Great Wall Motor to use its factory to build electric cars. In response, a Xiaomi executive dismissed it as fake news.

The report said Xiaomi's electric car would target the mass market, in line with the company's overall positioning for electronics.