Xiaomi shares closed at its lowest in 1 year at HKD19.06 on 26 November and traded at a low of HKD18.62 on 7 December; year-to-date the stock has tumbled 45.5%. Xiaomi has underperformed the Hang Seng Index which is down 12.65% year-to-date.
Last week, Xiaomi announced that it is building its first ever electric vehicle (EV) factory in Beijing marking a key milestone for the firm as it vies for a slice of China’s booming EV market.
Xiaomi executes plans for EV car production
The government praised Xiaomi for epitomising outstanding Chinese technology and smart manufacturing, saying that the company’s project will help Beijing become an innovation centre for smart EVs. This is an area where China wants to take the global lead.
Starting with US$1.5 billion, the company had set up a wholly-owned subsidiary to run its EV arm, with plans to pump in around US$10 billion over 10 years to achieve its EV dreams.
It will build a plant that that can produce 300,000 vehicles annually in Beijing for its EV unit.
The construction of the plant will take place in two phases, and its headquarters, sales, and research offices will be in the Beijing Economic and Technological Development Zone, said the government-backed economic development agency Beijing E-Town. Beijing E-Town expects the plant to reach mass production by 2024, in line with the announcement by Xiaomi’s chief executive in October (Reuters).