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Chinese EV players surprised by Apple's decision to cancel car project, with Xiaomi CEO Lei saying he remains committed

Apple's decision to abandon its plan to build electric vehicles has come as a surprise for China's ambitious EV players and stirred discussions among the founders of Xiaomi, Li Auto and Xpeng.

Lei Jun, founder and chairman of leading Chinese smartphone manufacturer Xiaomi, which unveiled its first car late last year, said in a Weibo post on Wednesday that he was "very shocked" by Apple's withdrawal from the EV sector.

The tech billionaire, who has long tried to cultivate his image as the country's answer to Apple founder Steve Jobs, said he "knows deeply how difficult it is to make cars", but added that Xiaomi has made an "unshakeable strategic choice" and remains committed to building EVs.

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Xiaomi, the world's third-largest smartphone manufacturer by shipments, announced its entry into the EV sector in 2021, with Lei calling the endeavour the "last entrepreneurship of my life".

Xiaomi founder and CEO Lei Jun at the unveiling of its first EV in December. Photo: Handout alt=Xiaomi founder and CEO Lei Jun at the unveiling of its first EV in December. Photo: Handout>

The Beijing-based firm showcased its first EV, the SU7, in December, after investing over 10 billion yuan (US$1.4 billion) to develop a prototype with a team of 3,400 engineers, according to Lei.

The SU7 will go through a few more months of testing before eventually hitting the market, Xiaomi previously said at the time.

News emerged on Tuesday that Apple was winding down Project Titan, its decade-long effort to build an autonomous EV, to shift resources to new businesses that take priority.

Apple plans to dispatch some of its 2,000 employees on the car venture to its artificial intelligence (AI) division, according to a report by Bloomberg. They will be working on generative AI and mixed reality, areas that are increasingly important for Apple, which launched the Vision Pro headset earlier this month.

Li Xiang, CEO of Beijing-based EV maker Li Auto, said Apple's decision is "absolutely right".

"AI will become the top-level entrance for all devices, services, applications and transactions, in which Apple should stay on top," he wrote on Weibo.

In recent years, Chinese brands have established a growing presence in the EV field, with Shenzhen-based BYD overtaking Elon Musk's Tesla as the world's top EV manufacturer last quarter.

Apple is cancelling its plans to build an autonomous electric vehicle, as the company shifts more resources to its Vision Pro headset and AI projects. Photo: Bloomberg alt=Apple is cancelling its plans to build an autonomous electric vehicle, as the company shifts more resources to its Vision Pro headset and AI projects. Photo: Bloomberg>

Li Auto, considered another major Chinese rival to Tesla, reported record profit in the last quarter, as net income doubled from the September quarter to reach 5.75 billion yuan. However, the company expects weaker sales in the current quarter because of a slowing economy.

In a Weibo post on Wednesday, He Xiaopeng, chairman of Guangdong-based carmaker Xpeng, also expressed disbelief that Apple is bowing out of the EV sector, even though he expects intense competition in the industry this year, when most newcomers are set to launch their products.

Xpeng plans to hire 4,000 new workers this year, as it puts flesh on the bones of a blueprint to roll out 30 new models over the next three years.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.