The tech firm's stock price jumped as much as 6.71 percent
in early Friday trade after Reuters reported the plan. Great Wall's Hong Kong
stock rose more than 8 percent and its Shanghai shares gained than more than 7
percent.
Xiaomi, one of the world's biggest smartphone makers, is in
talks to use one of Great Wall's plants in China to make EVs under its own
brand, said two of the people, who declined to be identified as the information
is not public.
Xiaomi will aim its EVs at the mass market, in line with the
broader positioning of its electronics products, the two people said.
Great Wall, which has not before offered manufacturing
services to other companies, will provide engineering consultancy to speed up
the project, said one of the people.
Both companies plan to announce the partnership as soon as
early next week, said one of the people.
Xiaomi and Great Wall declined to comment.
The plan comes as eight-year-old Xiaomi seeks to diversify
its revenue streams from the smartphone business which accounts for the bulk of
its income but carries razor-thin profit margins. It flagged on Wednesday
rising costs from a global chip shortage and reported quarterly revenue below
market estimates.
The move also comes against the backdrop of automakers and
tech firms working closer together to develop smarter vehicles with technology
such as smart cabins and autonomous driving.
Chinese search engine provider Baidu said in January it
plans to make EVs using an auto plant owned by Geely - an automaker with
aspirations to offer engineering consultancy and contract manufacturing.
Reuters has also reported Apple and Huawei's respective auto
ambitions.
Xiaomi's founder and chief executive, Lei Jun, believes the
firm's expertise in hardware manufacturing will help accelerate the design and
production of its EVs, one of the people said.
Alongside smartphones, Xiaomi makes dozens of
Internet-connected devices including scooters, air purifiers, and rice cookers.
The firm plans to launch its first EV around 2023, one of
the people said. It will enable its cars to connect with other devices in its
product eco-system, the people said.
Baoding-based Great Wall, China's biggest pickup truck
maker, this year launched a standalone brand for electric and smart vehicles.
It is also building an EV factory in China with Germany's BMW.
The automaker sold 1.11 million vehicles last year helped by
the popularity of models such as the P-series pickup truck and Ora EVs. It is
currently building its first factory in Thailand.
© Reuters
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