Broker: OCBC Investment Research
Date: 24 September 2024

Xiaomi’s Entry into the Electric Vehicle Market

Xiaomi made a significant move into the electric vehicle (EV) market with the launch of its first EV in late March 2024. By the second quarter of 2024, the company had delivered 27,000 units, with a full-year target of 120,000 units. This entry positions Xiaomi as a serious contender in the competitive EV space, leveraging its existing expertise in consumer electronics to make a mark in the growing industry.

Acquisition of DeepMotion and Focus on Autonomous Driving

Xiaomi accelerated its autonomous driving (AD) capabilities through the acquisition of DeepMotion Tech Limited in 2021 for USD 77.4 million. This acquisition strengthened Xiaomi’s ability in high-precision mapping and positioning—critical components for developing autonomous vehicles. Xiaomi’s R&D team for smart driving now exceeds 1,000 members, with plans to expand to 1,500 by the end of 2024. This strong R&D focus underscores Xiaomi’s commitment to developing full-stack autonomous driving solutions.

Extensive Road Testing and Development Milestones

Xiaomi has conducted more than 10 million kilometers of road testing for its autonomous driving technologies, highlighting its dedication to ensuring the safety and reliability of its systems. The company’s comprehensive approach to testing reflects its ambition to compete with established players in the autonomous driving sector.

End-to-End Sensing and Decision-Making AI Model

Xiaomi has developed the world’s first production-ready End-to-End Sensing and Decision-Making AI Model for automated parking. This model dynamically adjusts to complex parking scenarios, offering an advanced solution to one of the most challenging aspects of autonomous driving. The introduction of this AI model demonstrates Xiaomi’s focus on creating practical and innovative solutions for the EV market.

Future Growth Prospects in the EV and AD Market

Xiaomi’s strategic push into the EV and autonomous driving markets positions the company for significant growth. As one of the world’s largest technology companies, Xiaomi is well-placed to leverage its resources and expertise to gain market share in the automotive sector. Its focus on cutting-edge AD technologies, combined with extensive road-testing experience and a robust R&D team, will support its efforts to scale its EV business in the coming years.

Conclusion

Xiaomi’s expansion into the electric vehicle market, backed by strong investments in autonomous driving technology, represents a significant shift for the company. By combining its expertise in consumer electronics with new advancements in AD, Xiaomi is poised to play a major role in the future of electric mobility. With ongoing innovations such as its AI-driven parking system and a rapidly growing R&D team, Xiaomi is ready to compete in China’s dynamic and competitive EV market.