Today, Xiaomi issued a voluntary announcement confirming that the board of directors had formally approved the establishment of the smart electric vehicle business.
Xiaomi said that it plans to establish a wholly-owned subsidiary to be responsible for the smart electric vehicle business. The first phase investment is 10 billion yuan ($1.52 billion). But the investment is expected to reach $10 billion in the next 10 years.
According to the announcement, Lei Jun will concurrently serve as the CEO of the smart electric vehicle business.
In fact, previously, we have heard that Xiaomi will start making cars. But there has been no official confirmation. Even the head of Xiaomi’s public relations department has repeatedly denied it categorically.
However, prior to this, Lei Jun disclosed the so-called ‘Xiaomi $10 billion big project’. At that time, many were thinking this could only refer to the car business. The latest financial report shows that Xiaomi’s 2020 annual revenue is 245.9 billion yuan ($37.41 billion), and its cash reserves exceed 100 billion yuan ($15.21).
On January 15, Lei Jun said that they began to research and build cars. ‘I have visited Musk twice before, and I am very optimistic about the electric vehicle industry. I have also invested in nearly 10 electric vehicle industry companies in the past.’
Lei Jun Will Serve As The CEO Of Xiaomi’s Smart Electric Vehicle Business
Lei Jun revealed that in the past 75 days, there have been 85 industry visits, in-depth exchanges with more than 200 automotive industry veterans, 4 internal management discussions, and 2 formal board meetings.
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‘With high-quality smart electric cars, users around the world can enjoy ubiquitous life,’ Lei Jun said. This is the original intention of Xiaomi to build cars.
Lei Jun said frankly that he is very aware of the risks in the automotive industry. Also, the investment of tens of billions of dollars will take 3-5 years to be effective. But he also said that Xiaomi now has accumulated, and the company has a cash balance of 108 billion yuan by the end of 2020. Moreover, the company has a research and development team of more than 10,000 people. They also have the world’s top three smartphone businesses and the world’s best smart ecosystem. So the company can afford to lose money. These are important supports for the Xiaomi car business.
He added that ‘this will be the last major entrepreneurial project in his life. And he is willing to suppress all his reputation and fight for Xiaomi. One day, Xiaomi will succeed. As long as you are willing to wait, you must live up to expectations and bring Xiaomi cars to everyone as soon as possible.’
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After Xiaomi decided to build a car, Xiaomi engineers finally made a RV with a full set of Xiaomi smart home products for testing. This is also the first car Xiaomi built.