Smartphone giant Xiaomi's ambitions to launch a car brand may get a jumpstart via the acquisition of a stake in the Chinese company that owns NEVS, the Swedish electric-vehicle startup born out of the remains of Saab.
NEVS is owned by Evergrande Group, a conglomerate that has amassed huge debts from its main real estate business and is looking to raise funds by offloading assets.
Citing unnamed sources, Reuters reported last week that Evergrande is in talks with Xiaomi and state-backed investment firms about the sale of a minority stake in its Evergrande New Energy Vehicle car unit. The car unit includes NEVS, as well as Evergrande's own car brand, Hengchi, which in April unveiled no less than nine EVs. The car unit also has three plants in China, as well as the former Saab plant in Sweden.
Evergrande already sold 2.66% of its car unit in May to various investors in a deal worth about $1.36 billion. The car unit reported a loss of about $740 million for the first half of 2021.
Hengchi electric vehicles
Evergrande said in a statement that it has had preliminary talks about Xiaomi becoming a shareholder, though no other details were mentioned.
Xiaomi has also confirmed it is in talks with multiple automakers but hasn't made a decision on which one to work with.
According to Reuters' sources, the talks between Evergrande and Xiaomi are still at an early stage.
Xiaomi, which has already surpassed Apple to become the world's second biggest smartphone manufacturer, in April announced plans to invest $10 billion over the next decade to develop a car brand. Xiaomi CEO and founder Lei Jun has since said the company also wants to develop self-driving technology—a technology NEVS has been developing with its partners for several years.