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Xiaomi has deliberately moved to beef up its research and development in the new space with its purchase of an autonomous driving technology startup Deepmotion for over $77 million.
Foremost Chinese smartphone giant company Xiaomi has announced the completion of the official business registration of its electric vehicle unit.
The completion of the registration was announced in a statement by the smartphone maker, which became the world’s second top-selling brand behind Samsung in the second quarter.
The statement indicated that the new subsidiary, named Xiaomi EV, Inc, was founded with the previously announced registered capital of 10 billion yuan, an equivalent of $1.55 billion.
The statement also revealed that the company’s Chief Executive Officer legal representative, Lei Jun is its legal representative at the moment.
Unsurprisingly, details about the strategy and working plan of the new subsidiary’s activities in the automotive sector, including the type of vehicles it plans to produce are still shady. But an electric vehicle business looks likely because, in March, the Beijing-based company announced plans to launch an electric vehicle business and invest $10 billion over the next decade.
The statement indicated that 300 people have so far been employed to join the EV unit, with the firm also setting eyes on getting more hands to join its team.
Meanwhile, in the statement, the company revealed that since it began the project, around 2,000 interview surveys had been conducted and more than 10 different peers and potential partners in the automotive sector had been visited to discuss action plans.
This might not be far from the truth as a previous report from August had revealed that the smartphone maker had entered talks with beleaguered real estate giant, Evergrande Group. The discussion between the two companies was reported to be in line with the purchase of a stake in Xiaomi’s automotive unit.
While responding to the news back then, a spokesperson at the company revealed in a statement the company’s social media account that it is in touch with several automakers but has yet to decide which one to work with.
Xiaomi Ups Preparation for Electric Vehicle
The company has cemented its name in the smartphone market and with its production of internet-connected hardware. And with its recent dive into the electric car market, it would be competing against notable names in the space like Tesla plus other electric car startups like Nio and Xpeng.
However, the company appears undaunted as its recent acquisition has proven. Xiaomi has deliberately moved to beef up its research and development in the new space with its purchase of an autonomous driving technology startup Deepmotion for over $77 million.
At the close of the afternoon trading in Hong Kong, Xiaomi’s share had risen by over one percent, exceeding that of the larger Hang Seng Index.