Today, we heard that China Evergrande Group is negotiating with Xiaomi to sell shares in the electric vehicle division.
Xiaomi Negotiates With Evergrande Group
It turns out China Evergrande Group is negotiating with Xiaomi to sell 65% of its electric vehicle division. The source said that the negotiations are still at an early stage. Thus, nothing certain can be said at the moment. As you also guess, none of the parties commented on this.
However, it is worth noting that China Evergrande, Evergrande Auto, and Evergrande Property jointly announced that the company is contacting several potential independent third-party investors to discuss the sale of some of the company’s assets, including but not limited to the sale of the company’s listing Part of the equity of subsidiary China Evergrande New Energy Automobile Group Co., Ltd. and Evergrande Property Group Co., Ltd.
Subsequently, Evergrande Auto responded that they want to sell part of Evergrande’s assets, not the entire group. Regarding whether there are already interested investors, they said that the follow-up announcement would come soon.
Recently, Evergrande Automobile issued a profit warning announcement. As of June 30, the company will have a net loss of about 4.8 billion yuan ($0.74 billion). The net loss for the same period in 2020 was about 2.45 billion yuan (0.38 billion).
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In this regard, Evergrande Motor explained: “The net loss in the first half of the year was mainly due to the expansion of the new energy vehicle business. It was in the investment stage, conditioned with the purchase of fixed assets and equipment, the increase in R&D and other related expenses and interest expenses.”
It has been more than 5 months since Xiaomi announced that it will build a car. However, after the announcement, there have been no news until today. This doesn’t mean that Xiaomi should buy shares of the aforementioned company because it can build cars itself.
However, after Xiaomi announced the car production in March this year, Lei Jun subsequently visited many domestic auto companies, including Changan, GAC, SAIC-GM-Wuling, Great Wall, SAIC, Dongfeng, Bosch, CATL, etc.
But we should note that nothing worthy we could learn from those visits. Everything is done secretly. And when it comes to the dilemma of making your own car or partnering with traditional car companies, Xiaomi may follow Apple’s way. Not in vain, it is called Chinese Apple. We guess, in the near future, Xiaomi will issue some important statements on this.