$10 Billion Xiaomi Car Project Hits Regulatory Barrier
Xiaomi Corp. is facing difficulties getting regulatory approval for its electric vehicle project in China, an unexpected hurdle for the smartphone giant's $10 billion carmaking endeavor.
The Beijing-based company has been talking to officials at the National Development and Reform Commission about the licensing for months without success, according to people familiar with the matter.
Xiaomi is one of the later would-be entrants to a Chinese EV sector already teeming with rivals, including longer-established names BYD Co. and Nio Inc. But billionaire co-founder Lei Jun, who has said EVs will be his final startup endeavor, hopes Xiaomi's expertise in connected technologies and building loyal user communities can translate in the world's biggest EV market. But the longer the delay in securing a license, the bigger the head start its rivals will gain.
The smartphone and electronics maker is pursuing new growth areas after logging its first sales decline on record in the first quarter. While some Xiaomi executives are hopeful the authority will eventually green-light the EV project, others worry the process will delay the company's plans, said one of the people, who asked not to be named discussing internal matters. Xiaomi incorporated its EV subsidiary in September 2021, allowing the company to begin the application process.
Shares of Xiaomi fell as much as 5.4% on Friday in Hong Kong. A company representative declined to comment. The NDRC didn't immediately respond to a fax seeking comment.
What Bloomberg Intelligence Says
Xiaomi's difficulty in securing a carmaking license in China, as reported by Bloomberg News, could hinder its EV development and postpone the debut planned for 2024. The delay could prolong the drag from hefty
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