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Xiaomi spends tens of billions of RMB to develop electric vehicles, but it still can’t figure out the party’s will

Xiaomi spends tens of billions of RMB to develop electric vehicles, but it still can't figure out the party's will
Xiaomi spends tens of billions of RMB to develop electric vehicles, but it still can't figure out the party's will
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Xiaomi’s electric vehicle project, which cost tens of billions of RMB to develop, has not made progress so far. The key lies in China’s National Development and Reform Commission, which has been reluctant to approve Xiaomi’s plan.

 Xiaomi spends tens of billions of RMB to develop electric vehicles, but it still can't figure out the party's will

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In September 2021, Xiaomi, one of the Chinese technology giants, announced that it would invest 10 billion yuan to start developing electric vehicles, and registered Xiaomi Automobile Co., Ltd., and was ready to start, but it was delayed because of the failure of regulatory authorities.

According to foreign media reports, China’s National Development and Reform Commission and Xiaomi have been discussing for several months about the license to build electric vehicles, but there is still no result.

China’s fiercely competitive “new car-making forces” are surrounded, and the longer Xiaomi’s license is delayed, the further the gap will be widened by Xiaopeng, Weilai, and Ideal. Several Xiaomi executives said that after the first decline in sales this year, electric vehicles were a new front in an attempt to break through the deadlock, but now the plan may change. “The authorities will eventually give Xiaomi the green light, but the whole plan is far behind schedule,” said an unnamed Xiaomi executive.

After the establishment of Xiaomi Automobile Co., Ltd., it began to apply for a supervision license. In other words, the whole process dragged on for nearly a year, and it was still unable to start.

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Originally, Xiaomi estimated that the Xiaomi Smart Car would be released in 2024, but due to the delay in the licensing process, the research and development process will be longer and the cost will be more expensive, which is a burden on the cost of human and hardware resources.

Why does China have a lot of control over electric vehicles? China’s “New Energy Vehicle Production Access Management Rules” stipulates that any business that intends to build vehicles using unconventional fuels must apply for approval. This is because in the early days, in order to encourage innovation, the government provided many subsidies. Later, many business operators randomly applied for licenses and defrauded subsidies. Later, the government took strict scrutiny and required a large number of documents, equipment purchases, and complete development plans to obtain evidence before they could obtain licenses.

But if Xiaomi wants to build a car, it should not be cheating subsidies, why is it still being made difficult? The auto industry is a high-capital, high-labor, and high-tech industry. Every Chinese car factory, whether it is a traditional car factory or a so-called new force, has a certain political foundation behind it. Lei Jun and Xiaomi want to enter this market to get a share of the pie. There are quite a few places to manage. Before “Joe” is good at all parties, it is impossible for Xiaomi to obtain permission easily.

Interestingly, even if the license has not yet been obtained, Xiaomi’s electric vehicle project department has more than 1,000 employees, investing in related technology research and development, and has also acquired land in the suburbs of Beijing for factory land, and has also acquired new electric vehicle innovations to expand the technology base.

Xiaomi has not officially responded, so the plan to release a new car in 2024 remains unchanged, but in the face of such a fierce Chinese electric vehicle market, anyone can imagine that Xiaomi’s selling point is to be cheap. It’s really curious how low it goes.

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