Xiaomi founder Lei Jun says firm’s EV business will have to become a top five player to succeed as industry consolidates
- Lei Jun said the competition ahead in the EV industry will be brutal amid consolidation
- Xiaomi founder expects the top 5 global players to take 80 per cent of the EV market when it matures
Lei Jun, the founder and chief executive of smartphone giant Xiaomi Corp, said the only way its electric vehicle (EV) business will succeed is if it becomes one of the world’s top five EV makers as the industry is set for consolidation.
Lei, often referred to as China’s Steve Jobs, believes that EVs are just like smartphones, which “are a form of consumer electronics” and that “the essence of the auto industry will evolve from mechanics to consumer electronics”, according to his post.
To become one of the top 5 global players, which he expects will take 80 per cent of the market when it is mature, Xiaomi will have to ship more than 10 million cars annually, he said. That is a very aggressive target, given that current industry leader Tesla said it manufactured 258,580 units globally in the second quarter.
China’s top EV companies include Nio, Xpeng, Li Auto, BYD and Geely’s Zeekr.
Last March Xiaomi announced an expansion into the EV industry with an investment of 10 billion yuan (US$1.4 billion) over 10 years. It began building its first factory on the outskirts of Beijing late last year with the goal of getting its first vehicle, either an SUV or a saloon, on the road by 2024.
Xiaomi, known for its budget devices, said in August it had cut more than 900 jobs, or nearly 3 per cent of its workforce, over the previous three months as revenues continued to shrink amid an economic slowdown in China.
Xiaomi’s Hong Kong-listed shares rose 1.9 per cent to HK$9.11 (US$1.16) on Thursday.