A Xiaomi subsidiary has successfully secured a bid to acquire a piece of land in Beijing near its current automotive manufacturing facility for 635 million yuan ($88 million), which it intends to utilize for a project focused on smart connected vehicles and components.
This plot is adjacent to the second phase of Xiaomi's electric vehicle manufacturing facility.
Xiaomi Jingxi Technology, the successful bidder obtained the second phase, spanning 531,130 square meters, for 842 million yuan in July 2024. The project reached its finalization stage in April.
Winning this tender positions Xiaomi among the few auto manufacturers in China permitted to increase production capacity while most of the industry faces issues of overcapacity.
Xiaomi reported that its new YU7 sports utility vehicle is attracting more interest than the SU7 sedan, and on its app, customers may have to wait as long as 51 weeks to receive their Xiaomi vehicles as the company increases production.
As the world's third-largest smartphone manufacturer, Xiaomi launched the SU7 sedan last year and has consistently outsold Tesla's Model 3 on a monthly basis since December.
A Chinese technology firm has recently acquired a piece of land in Beijing for 842 million yuan ($116 million) to enhance its electric vehicle production following the positive reception of its initial sedan.
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The 53-hectare (131-acre) parcel is located near Xiaomi’s current electric vehicle manufacturing plant in the Yizhuang district of the capital, as revealed in documents released by the Beijing Municipal Commission of Planning and Natural Resources. This property was purchased by Xiaomi subsidiary Xiaomi Jingxi Technology Ltd. and will serve for the “development of the high-end automobile and new energy intelligent vehicle industry,” the documents indicate.
In March, Xiaomi entered the automotive sector with its base model SU7 priced at 215,900 yuan, marking the initial phase of Chief Executive Officer Lei Jun’s ambitious $10 billion strategy to establish a significant presence in the electric vehicle market. Lei announced earlier this month that the company has already delivered 30,000 vehicles and is on track to achieve its initial sales goal of 100,000 vehicles by November 2024.
Xiaomi's achievements in the electric vehicle sector contrast sharply with those of rivals who are facing challenges in capturing market share within an oversaturated industry. Beijing eliminated national subsidies for electric vehicle purchases in 2022, and decreasing demand has led various electric vehicle manufacturers, including WM Motor Technology Group and the premium HiPhi brand from Human Horizons Shanghai Internet Technology Co. Ltd., to either go bankrupt or halt production.
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The company, primarily known for its smartphones, also intends to start producing and selling a sport utility vehicle akin to Tesla Inc.’s Model Y as early as 2025. It has indicated plans to commence work on the second phase of its vehicle production facility, with construction expected to be finalized in 2025. The first phase of the factory is designed to have the capacity to produce 150,000 cars per year.