Among a rash of Chinese tech behemoths venturing into the car manufacturing business over the past year, newcomer Xiaomi may pose the most serious competitive threat to other carmakers. With a strong brand name and a dominant position in the country’s consumer electronics market, a Xiaomi car has the potential to turn the automobile and mobility industry upside down in the coming decade.

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Now the Chinese smartphone giant is saying a Xiaomi car will be coming in the next few years. Speaking at Xiaomi’s annual investor day on Oct. 19, Chief Executive Lei Jun said the company is aiming to mass produce its first electric vehicle model for consumers in the first half of 2024. The company reportedly (in Chinese) has a master plan for its auto business, eyeing a total sales target of 900,000 vehicles within three years of production. That number would be almost equivalent to China’s total EV sales in 2019.

Bottom line: The auto industry has been uncharted territory for Xiaomi, but boss and founder Lei, 51, is setting wildly ambitious goals for the car-making project, which he calls “my last major entrepreneurial project.” A latecomer to the transition from fossil-fueled vehicles to the future of electric and autonomous mobility, Xiaomi is largely unprepared (in Chinese), even compared to newbie entrants such as Baidu and Huawei. To catch up, the company is pouring billions of RMB into the sector and placing some big bets on multiple startups as it attempts to build a complete auto supply chain.

Here’s a look at some of the company’s biggest deals in the auto industry. 

Chipmaking: Black Sesame

Black Sesame Technologies, a five-year-old Chinese auto-chip startup, announced on Sept. 22 that it had raised “hundreds of millions of dollars” from Xiaomi and other investors. Black Sesame became the smartphone maker’s first big bet in auto-chip designing. One of Xiaomi’s investor affiliates, Hubei Xiaomi Changjiang Industrial Investment Fund, led a Series C investment announced the same day as the strategic investment, which valued Black Sesame at over $2 billion.

Already backed by renowned investors including auto major SAIC, Black Sesame is one of the three domestic companies with the potential to develop high-performance central processors for next-generation electric and connected vehicles, an investment manager who declined to be named told TechNode in September. The other two domestic chip powerhouses are considered to be Huawei and Horizon Robotics. China’s consistent pursuit of self-sufficiency in chip manufacturing may be what made Black Sesame an attractive deal for Xiaomi, this person added.

Xiaomi and Black Sesame have yet to share details about any potential collaboration. And yet the Chinese chipmaking upstart in April unveiled its powerful A1000 Pro chipset. The chipset claims to have a processing speed of 196 trillion operations per second (TOPs), which would outperform Tesla’s full self-driving (FSD) computer running at 144 TOPs. Black Sesame also said its four-chip full autonomous driving system will be capable of a range of applications such as highway and urban driving. The system is scheduled for release with mass production vehicles by the end of 2022.

Autonomous driving: Deepmotion

Following the announcement of its own electric vehicles in March, the only acquisition that Xiaomi has publicly made known to date was its $77.37 million buyout in August of Deepmotion, a Chinese self-driving startup with Microsoft roots. Acquiring the team of a well-known but struggling software startup is expected to help Xiaomi to absorb the talent inside of the company and finally discover a path to develop its branded consumer vehicles with autonomous driving capabilities.

Founded by four computer scientists from Microsoft Research Asia, the biggest overseas research arm of the US tech company, Deepmotion in mid-2017 began working on high-definition 3D maps and localization functions for autonomous vehicles (AVs). However, the company never obtained the required license for surveying and mapping from the central government. It later pivoted to develop AI algorithms and software that enable the use of HD maps and camera sensors for vehicles to navigate the roads.

Thus, the hints are strong: Xiaomi will probably adopt a very conventional approach to self-driving technology by using multiple sensors to help AVs navigate, competing head-to-head against players such as Nio and Xpeng Motors in this space.

In separate moves, the Chinese smartphone maker earlier this year invested in Geometrical Pal, another startup that develops software solutions for radar sensors used in AVs, while also backing Zongmu Technology, a company with a specialty in software development for self-parking functions.

Lidar: Hesai

Xiaomi in June made news again by co-leading the $300 million investment in a top Chinese lidar supplier, making its first bet on what has been heralded as a crucial component enabling self-driving cars to perceive the world. The company, called Hesai, has long been among the highest funded lidar companies worldwide; its products are used in most Chinese self-driving cars. At least 10 out of the top 15 robotaxi developers worldwide are reportedly (in Chinese) among its clients, including Baidu and Didi.

China’s highest-valued lidar startup, Hesai used to develop mechanical spinning lidar sensors for self-driving prototype vehicles. They were usually perched on car roofs with a set of rotating laser sensors housed in motorized turntables to provide 360-degree vision. Such bulky rotating sensors are too unreliable and expensive for mass production vehicles. Hesai in 2019 therefore launched a more compact, solid-state lidar unit which it claims could spot small, dark objects at a range beyond 300 meters.

Chinese automakers and their lidar partners have been working to include lidar, still an immature technology compared with cameras and radar, in their future production vehicles for accommodating high levels of automation. Hesai said in a June statement that the $300 million war chest would be used to accelerate mass delivery of its solid-state lidar units to multiple auto clients without elaborating further. Xiaomi did not reveal details of a possible deal with the company. 

READ MORE: Lidar is hard—but it’s coming soon 

Batteries: Svolt

Partnering with battery makers has become a critical piece of automakers’ plans to secure enough battery supplies as they produce millions of EVs in the next few years, and Xiaomi is no exception. The smartphone giant has actually invested in four Chinese companies across the battery supply chain. In its most recent bet, the company joined a group of investors to pump RMB 10.3 billion ($1.6 billion) into Svolt, a battery maker formed by automaker Great Wall Motor.

The Series B, led by Bank of China Group Investment with participation by IDG Capital and others, has reportedly (in Chinese) pushed Svolt’s valuation to about RMB 36 billionsome 38% higher than just six months ago. A distant rival to the likes of CATL and BYD, three-year-old Svolt is stepping up efforts to jostle for market share with plans to increase its production capacity to over 200 gigawatt-hours (GWh) by 2025. That would be one-third of the capacity of market leader CATL.

As China’s EV sales continue to grow at an astonishing pace, Xiaomi, like many other automakers, is rushing to build a sustainable supply chain to make sure its future models won’t be held up by a battery crunch. Previously, the consumer electronics company had poured RMB 375 million into Ganfeng LiEnergy, the battery-making unit of lithium producer Ganfeng Lithium, according to a statement (in Chinese) released on Jul. 31. Another Chinese battery maker, CALB, also raised an undisclosed amount of funding from Xiaomi and others last December, reported Shanghai Securities News (in Chinese).


In a matter of months, Xiaomi has rapidly acquired capabilities, ranging from software development to chip manufacturing, which could facilitate the company’s ambitious plan to build a complete supply chain under its control and finally make EVs on its own.

However, the consumer electronics giant, still new to auto making, faces the formidable challenges of pulling together these partners from various sectors, managing an entire auto supply chain, and navigating persistent global supply disruptions. Furthermore, Xiaomi has yet to reveal where it intends to manufacture its EVs, triggering speculations about possible contract manufacturing with carmakers such as Great Wall Motor, while peers Baidu and Huawei moved quickly to partner with Geely and BAIC, respectively.

Previously an investor in both Nio and Xpeng Motors, Xiaomi now finds itself competing against these established EV makers. Nio and Xpeng earlier this year hit notable milestones, each delivering more than 100,000 vehicles to customers. Even farther ahead are the dominant EV market players, Tesla and GM’s Wuling. These automakers are all well prepared to defend their territories from attacks by upstarts like Xiaomi. The race will stretch long into the future.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen