Chinese technology giant Xiaomi is facing issues in making progress with its $10 billion automotive venture.
Reports claim that Xiaomi has been speaking with officials from the National Development and Reform Commission in China but is facing difficulties in getting regulatory approval for its car project.
Speaking with Bloomberg, a source with knowledge of the matter revealed that some Xiaomi executives are hopeful that authorities will soon green-light the project but others suspect that the hurdles will delay the brand’s plans.
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“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,” Bloomberg Intelligence analysts Steven Tseng and Sean Chen said. “The delay could prolong the drag from hefty R&D expenses as well as fixed asset investments and may weigh on its market share as China’s EV segment is getting increasingly crowded with fast-growing rivals Nio, Xpeng and Li Auto.”
Companies seeking to enter China’s burgeoning industry of electric vehicle manufacturers are required to submit documents to prove their financial and technological capabilities. It is understood that this review process can take several months and that sometimes, the government completely rejects applications.
A source suggests that the lack of a carmaking license in China hasn’t slowed down Xiaomi’s early development of its first electric vehicle, nor its plans to establish a large factory near Beijing.
News of Xiaomi still waiting on regulatory approval comes just a couple of weeks after reports indicating that the company will showcase an engineering prototype of its first EV at a public event in August. It is understood that the design of the car has been led by Shanghai HVST Automobile Design and that production of the finished product should start in 2024.
