First, the Apple (AAPL 1.27%) Car, and now this: On Friday, Reuters reported that Chinese smartphone maker Xiaomi (XIACF 3.40%) plans to begin manufacturing electric vehicles (EVs).
Citing "three people with direct knowledge of the matter," the news agency wrote that Xiaomi would make its automobiles in a factory owned and operated by Great Wall Motor Company (GWLLF). The latter is a major Chinese manufacturer concentrating on SUVs and pickups. It controls the Haval, ORA, WEY, and GWM Pickup brands.
Image source: Getty Images.
However, Great Wall has stated that it hasn't discussed a carmaking partnership with Xiaomi. Great Wall has never provided third-party manufacturing services to another company.
Regardless, the article's sources say that for the Xiaomi partnership, Great Wall will act as an engineering consultant for the new EVs. They added that Xiaomi aims to produce mass-market vehicles, which would mirror its approach with smartphones. The autos will carry the Xiaomi brand, and the company hopes to launch them around 2023.
If the speculation proves to be true, Xiaomi's move would have some precedent. There's Apple Car from the iPhone maker, which, although not yet confirmed by the company, has been strongly rumored to be in development for years.
Closer to home for Xiaomi, internet giant Baidu announced in January it would utilize a Geely (GELYF 1.80%) factory to start producing its own EVs; Geely will act as a consultant for this project.
Xiaomi has not yet commented on the Reuters report.
Investors seem excited by the prospect of Xiaomi's venturing into the white-hot market for EVs, and unconcerned that the company has basically no experience in this field. Xiaomi stock surged 8.5% higher on Friday, trouncing the gain of the S&P 500 index.