Those familiar with the matter say that Xiaomi and Beijing Automotive Group are in talks to collaborate on the production of electric vehicles. It comes as the tech firm works feverishly to deliver on its pledge to manufacture its automobiles by 2024.
Combination of two industry giants
According to the interviewees, the two companies are exploring many options, including the possibility of Xiaomi acquiring a stake in the Beijing Hyundai No. 2 plant, which has a full license to produce automobiles in China. A first rapprochement would have taken place between the two manufacturers. It is rumored that Xiaomi is planning to enter into a production partnership, as the company is struggling to obtain a license to produce automobiles on its own and therefore needs help.
” With the arrival of new competitors, the electric vehicle market in China is becoming an increasingly important source of competition.. –Kharpal.
According to those involved, the arrangement may result in vehicles created by Beijing Automotive’s electric vehicle (EV) brand, BAIC BluePark New Energy Technology, and then co-branded with Xiaomi.
Also, it is possible to sell the automobiles under either brand. They also mentioned that BluePark has production capabilities that could be used to create vehicles made by Xiaomi and BAIC.
This is in contrast to Facility #2, which is outdated and requires significant upgrades to produce electric vehicles, and they contrasted this with the fact that BluePark has these capabilities.
A pas de deux still a little hesitant
Following this news, the share price of BAIC BluePark in Shanghai increased by 8.8%, and the share price of Xiaomi in Hong Kong recovered losses of up to 0.7% and s is trading up to 3.3% higher. These two price increases took place simultaneously.
The fact that the negotiations are still in their infancy, as stated by those involved, indicates that there is no guarantee that they will lead to a settlement, let alone an agreement.
Separately, a Xiaomi spokeswoman declined to comment, and BAIC did not immediately respond to requests for clarification. For his part, a representative of Hyundai said that the accusations are baseless. But the company chose not to offer any further comment beyond that.
” The government has supported the country’s electric car market, which has helped the industry expand. Despite the reduction of part of this funding, the market continues to develop. – Arjun.
Boom in the Chinese electric vehicle market
By cooperating, Lei Jun, co-founder of Xiaomi, may be able to fulfill his commitment to invest about 10 billion US dollars over the next ten years in manufacturing Xiaomi-branded automobiles by 2024.
After a large number of companies entered the market, thanks to tax cuts and government incentives, China is keeping a close eye on electric vehicle companies. Mergers and acquisitions are encouraged by Beijing, to facilitate a more efficient distribution of resources within the industry.
Aspiring electric vehicle manufacturers are currently required to demonstrate their financial and technological prowess, and producers of non-traditional motors headquartered outside of China or still in the research and development phase must meet production targets. strict sales.