Smartphone giant Xiaomi in talks with carmakers for auto partnership

Xiaomi is a leading brand when it comes to consumer electronics but its ambitions to enter the electric vehicle (EV) space has been no secret either. But driving in on its own would be a herculean task and the Chinese company is well aware of it. As such, Xiaomi Corp. has reportedly held talks with a number of local carmakers in a bid to establish a parntership that would allow it to gain a foothold in the highly competitive yet high lucrative EV playfield.

China is the world's largest automobile market. It is also the world's largest EV market. And while Xiaomi plays a strong game in the consumer electronics' space here, the company is looking to bat big in the mobility arena too. According to a Bloomberg report, the company has reached out to a number of Chinese car companies to explore the potential of a possible partnership. The list includes companies like Brilliance Auto Group Holdings Co. and Chery Automobile Co.

Xiaomi has big and clear objectives. It wants to offer electric cars under its own brand name. This even though it has not yet received government authority in China to manufacture its own products. Approvals from the country's Ministry of Industry and Information Technology are still awaited. It is therefore being speculated that Xiaomi wants to enter into a partnership with a carmaker in order to get its models manufactured.

Why enter the mobility space at all?

Xiaomi is a big player in the smartphone space but also offers a number of other consumer products like television sets, vacuum cleaners, air purifiers and even smart locks. Battery-powered hoverboards and micro cycles are also available in select markets. But the electric car game is what remains the ultimate objective. And there is good reason why.

The Chinese EV market is predicted to grow exponentially in the times to come. The government is determined to push EVs to a wider set of buying audience and earlier this year, even spelt out a roadmap to take such vehicles to rural parts of the country. Subsidies have been brought back to bolster demand and therefore sales.

The competition is fierce between local and global players but most experts agree that the pie is large enough to accommodate existing as well as new participants. It is a fertile ground that Xiaomi wants to plough into aggressively. Xiaomi co-founder Lei Jun previously pledged an investment of around $10 billion for development and manufacturing of EVs. And as the smartphone business continues to boom, entering the mobility space may allow the brand to widen its ambit.