China’s Evergrande In Talks With Xiaomi To Sell Stake in Its EV Unit: Report

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The potential deal would give Xiaomi EV production facilities to push forward its auto business, the sources said

Chinese smartphone brand Xiaomi’s electric vehicle ambitions seem to take flight as it is reportedly in talks with Chinese property developer Evergrande Group to buy part of a 65 per cent stake in its electric vehicle (EV) unit, Reuters reported while citing sources.

Earlier this year, Xiaomi Corp had announced in a filing its entry into the automotive industry with a new smart electric vehicle (EV) business.

Evergrande New Energy Vehicle (NEV) Group had a market capitalisation of $12.5 billion on Thursday and one of the sources told the publication the Xiaomi consortium is looking to buy a significant minority stake.

The talks were said by the sources to be at an early stage and subject to changes.

The potential deal would give Xiaomi EV production facilities to push forward its auto business, the sources said.

Debt-ridden Evergrande NEV warned of a 4.8 billion yuan ($739.67 million) net loss for the first half of 2021, according to its filing with the Hong Kong Stock Exchange, nearly double the loss a year ago.

The company unveiled nine EV models under the brand Hengchi at the Shanghai Auto Show earlier this year, vowing to start mass production and delivery from next year.

It has built three manufacturing bases located in Guangzhou, Shanghai and Tianjin, and acquired a production permit for electric passenger vehicles by taking the controlling stake in NEVS AB in 2019.

Xiaomi had said it will initially invest 10 billion yuan ($1.52 billion) in the wholly-owned EV subsidiary, with a total investment goal of $10 billion over the next ten years. Xiaomi CEO Lei Jun will also serve as CEO of the smart electric vehicle unit.

Recently, media reports said that Xiaomi Corp is in talks to use one of Great Wall Motors Co’s plants in China to make EVs under its own brand.

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