Xiaomi has achieved enough brand recognition and financial power to start its venture into the world of electric cars. In the meantime, smartphones and IoT products are still the Chinese company’s bread and butter, which is why it’s also building a second Xiaomi Smart Factory in the Beijing district.
Xiaomi today announced it will acquire autonomous driving startup DeepMotion in a deal evaluated at around $77.3 million, joining the list of big Chinese tech companies that have signaled their interest in the electric car market.
Earlier this year, Xiaomi explained that it would jump with both feet into the EV pond with the creation of a wholly owned subsidiary dedicated to making electric cars. The new venture will be led by Xiaomi co-founder and CEO Lei Jun, and will receive a cash injection of 10 billion yuan ($1.54 billion) over the next 10 years.
Details are scarce at this point, but judging by its other businesses, Xiaomi will likely design the cars in-house and contract other companies to manufacture them. As with phones and smart home products, the cars would be sold at or close to their manufacturing cost while profits would be extracted from a variety of services around “smart EVs.”
The news comes just as Xiaomi reported on its financial results for the second quarter of this year. The company saw net income of 8.26 billion yuan ($1.28 billion) on revenue of 87.8 billion yuan ($13.57 billion). This is a 64 percent year-over-year increase in revenue and an 80 percent surge in net income over the same period a year ago.
Xiaomi has benefited greatly from Huawei’s downfall and Samsung’s production issues, which propelled the Chinese tech giant to the top position among global smartphone brands in terms of sales. Phone revenue alone was $9.1 billion, and the company says it shipped over over 12 million units priced at $350 or above.
Revenue from IoT and lifestyle products was up 36 percent year-over-year to $3.2 billion, thanks in no small part to electric scooters and the smart TV lineup which sold 2.5 million units worldwide. Internet services brought an additional $1.08 billion.
The company told investors during a conference call that construction of its Changping Smart Factory in the Beijing district is well underway, with a planned annual production capacity of up to 10 million smartphones of the high-end variety.
The plant is said to operate with a minimal human workforce when ready, but Xiaomi is likely to run into similar issues as Apple when trying to automate every step of the manufacturing process.