- Kyle Chua
Xiaomi’s EV Plans Reportedly Hit Regulatory Snag, 2024 Launch Could Be Delayed
Xiaomi's electric vehicle (EV) ambitions have reportedly hit a regulatory snag in China, which could possibly derail the company's plans and delay the supposed debut of the line in 2024.
Citing sources familiar with the matter, Bloomberg claims the Chinese electronics giant has been talking to authorities from the National Development and Reform Commission about securing the necessary licenses of its first electric car for months to no avail.
While the report doesn't specifically state the reason why, it does note that China has been ramping up scrutiny of the EV sector as of late. Over the last few years, the sector saw a rush of startups, but due to a number of factors, including volatile policies and a market that was close to overcapacity, many burned through their capital and later filed for bankruptcy.
Now, the government seems be much stricter on EV players looking to enter the sector, with new applicants being required to submit documents that prove their financial and technological capabilities. The review process can also take months, and not all applicants are granted approval.
Bloomberg further claims Xiaomi's executives are still hopeful they'll eventually get the green light. However, they do hope to get it sooner rather than later. Delaying the process could force the company to reconsider its plans and perhaps push back its target release window of 2024.
This could hurt Xiaomi's chances against its competitors, considering how it is already a relatively late-entrant in what is a growingly crowded and competitive space. The longer the delay, the better the headstart its competitors will supposedly get. And Xiaomi likely needs every advantage it could get as it'll be competing with more established names in the industry, such as BYD Co., Nio Inc. and Tesla.
But Lei Jun, Founder of Xiaomi, remains optimistic, hoping to translate the company's expertise in connected technologies and building loyal user communities into its electric vehicle efforts. The lack of carmaking license allegedly hasn't had much impact internally.
Multi-billionaire Jun in early 2021 pledged to invest around $10 billion over 10 years to make Xiaomi electric cars. The division working on it now has more than 1,000 employees on its payroll. Xiaomi has also acquired land in the southeastern part of Beijing, which it plans to use for an assembly plant and bought out other EV startups to leverage their technology.
Reports surfaced a couple of weeks ago that Xiaomi plans to unveil the vehicle as early as the end of August. It's still unclear as of now if that will push through given this regulatory snag.
Xiaomi's electric vehicle (EV) ambitions have reportedly hit a regulatory snag in China, which could possibly derail the company's plans and delay the supposed debut of the line in 2024.
The Chinese electronics giant has been talking to authorities about securing the necessary licenses of its first electric car for months to no avail.
However, Xiaomi's executives are hopeful they'll eventually get the greenlight.
But the delay could hurt the company's chances against its competitors, considering how it's already a relatively late-entrant in what is a growingly crowded and competitive space.