Samsung Chairman Lee Jae-yong and Xiaomi Chairman Lei Jun recently met in Beijing for a potential collaboration between the two companies on electric vehicles. While Xiaomi is expanding its electric vehicle business, Samsung is focusing on its automotive parts business. The two companies could form a strategic partnership that shapes the future of the industry.
Samsung Chairman visits Xiaomiโs EV factory
According to a report from the Korean outlet Hankyung, Chairman Lee was in China last week to attend the China Development Forum (CDF) hosted by the State Council of China. As part of his tour, he visited Xiaomiโs electric vehicle factory in Beijing on March 22, where he met Chairman Lei to discuss business collaboration. It is worth noting that Xiaomi has made the meeting between the two companies public โ their last known meeting took place in China in May 2018.
Samsung and Xiaomi are business rivals in areas like smartphones and home appliances. Xiaomi holds 14% of the global smartphone market, which is led by Samsung with a 19% share. But when it comes to vehicle parts, both companies could be partners to lead in the electric vehicles industry.
Samsung makes semiconductors, displays, multilayer ceramic capacitors, batteries, and digital instrument clusters and speakers. On the other hand, Xiaomi recently joined the electric vehicles industry with its first electric vehicle, the Xiaomi SU7. Last year, Xiaomi sold 136,854 units of the SU7 series.
Its innovative business sector, including electric vehicles, brought in 32.8 billion yuan (about 6.6 trillion won) in revenue. Xiaomi aims to sell even more vehicles this year, with plans to expand to other countries by 2027. So, if Xiaomi wants to make high-tech electric vehicles, Samsungโs automotive parts and technology could help.
Due to strong competition from local Chinese suppliers such as BOE (Displays) and CATL ( Batteries), Samsung is struggling to achieve success in Chinaโs vehicle parts market. These Chinese suppliers dominate the market, supplying vehicle parts to local vehicle makers like Xiaomi.
Industry experts think that both companies need each other. An industry insider said, โAs the head of Samsung, Chairman Leeโs support, who has built up connections in the global industry, is needed more than ever,โ and โXiaomi also needs Samsung to advance into the premium electric vehicle market.โ
