Xiaomis electric car project faces resistance from Chinese regulators

Xiaomi’s electric car project faces resistance from Chinese regulators

Xiaomi, which launched a $10 billion electric car project some time ago, faced unexpected obstacles from Chinese regulators. According to Bloomberg, citing industry sources, the well-known provider has been negotiating unsuccessfully with the National Development and Reform Commission of China for several months.

    Image source: Xiaomi

Image source: Xiaomi

Xiaomi is a bit late in entering the Chinese electric car market, which already has many companies – from Chinese BYD and NIO to American Tesla. Still, one of Xiaomi’s founders, Lei Jun, who is overseeing this direction, expressed hope that Xiaomi’s experience in connected electronics technologies and creating loyal user communities can be useful in the largest electric vehicle market. However, the longer companies do not issue a license for the corresponding activity, the greater the advantage over future competitors will be.

A well-known manufacturer of smartphones and electronics is actively looking for new growth points. Though Xiaomi hopes authorities will give the green light to the electric vehicle project, some top executives fear the licensing process will force a delay in the company’s plans. The industry involved in the development of electric vehicles was registered in September 2021, which allowed the seller to apply for permits long ago.

According to Bloomberg, Xiaomi’s difficulties in obtaining an electric vehicle manufacturing license could hamper electric vehicle development and help delay the 2024 scheduled debut of the company’s first car. There could be other downsides, too, including reducing available share of China’s electric car market, which is actively claimed by fast-growing rivals like Nio, Xpeng, and Li Auto.

    Image source: Andrew Roberts/unsplash.com

Image source: Andrew Roberts/unsplash.com

Recently, Chinese authorities tightened control over the electric vehicle sector after the recent “market fever” led to a string of high-profile bankruptcies. Those wishing to apply for a manufacturing license are now required to submit a series of documents to demonstrate their financial and technological viability, and the application review process can take months. Also, the government sometimes rejects applications, then the company literally has to start collecting documents from scratch.

However, Bloomberg believes that the lack of a license has limited impact on Xiaomi’s development. The electric vehicle division already has more than 1,000 employees and the company still claims to unveil the first car in 2024. Earlier it was reported that the first prototype will be ready in the third quarter of this year. The manufacturer has already bought land in the Beijing suburbs to build an assembly plant and acquired several EV-related startups for additional technology.

In early 2021, Lei Jun pledged to invest $10 billion over 10 years in the production of Xiaomi-branded machines. The entrepreneur is primarily dedicated to the electromobility business and largely holds back from managing other projects.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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