HONG KONG—Chinese electronics giant Xiaomi Corp. became the latest tech company drawn to China’s burgeoning electric vehicle market, pledging $10 billion over the next decade to the initiative.
Xiaomi Chief Executive Lei Jun will lead the new stand-alone subsidiary focused on electric vehicles, the company said Tuesday. It will spend an initial 10 billion yuan, equivalent to about $1.5 billion, to launch the business, expanding its investment in the coming years.
Xiaomi’s entrance into electric vehicles makes it one of China’s most prominent tech companies to date to join what is an increasingly crowded market. Xiaomi’s status as a popular consumer brand with a rapidly expanding global footprint, could give it an edge over rivals, though new entrants into the car market face significant hurdles.
Mr. Lei appeared late Tuesday before a cheering theater of spectators in Beijing following the announcement. He told the audience that he had deliberated for months with the company’s board about whether Xiaomi should enter the electric vehicle market. He said he ultimately decided that the company’s ample cash cushion gave him the confidence to move forward.
“We have accumulated a lot of wisdom and experience and it’s time for us to try the waters,” Mr. Lei said.