Xiaomi acquires autonomous driving firm as it looks to boost nascent electric vehicle business – CNBC

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A Xiaomi logo is seen at a Xiaomi store on June 22, 2021 in Shanghai, China.

Wang Gang | Visual China Group | Getty Images

GUANGZHOU, China — Chinese electronics giant Xiaomi has acquired an autonomous driving start-up, jumping into an extremely competitive area, while trying to diversify its business beyond smartphones.

Xiaomi said Wednesday it had acquired Deepmotion for around $77.37 million to “enhance the technological competitiveness” of its electric vehicle business.

In March, Xiaomi announced plans to launch an electric vehicle business and invest $10 billion over the next 10 years.

The acquisition could help bring autonomous driving features to the cars Xiaomi eventually produces, a feature being developed by many automakers for next-generation electric vehicles.

Xiaomi’s electric and autonomous vehicle ambitions will pit it against China’s other technology giants in what is becoming an increasingly crowded space. Xiaomi will compete with companies like Baidu and even Huawei, as well as carmakers including Tesla, Xpeng and Nio.

The company announced the Deepmotion acquisition after reporting financial results for the second quarter which saw revenue surge 64% year-on-year to 87.8 billion yuan ($13.5 billion). Xiaomi said total revenue and adjusted net profit hit record highs in the quarter.

Smartphones accounted for 67.3% of total revenue but the company has looked to reduce its reliance on mobile phones by pushing into other internet-connected devices. The company hopes electric vehicles can be a new revenue stream.

Xiaomi shares were down nearly 4% in afternoon trade.