Tesla's recent lawsuit has thrust Xiaomi's automotive venture into the spotlight of public discourse.
According to corporate data platform Qichacha, on September 5, Tesla (Shanghai) Co., Ltd. filed a lawsuit against Bingling Intelligent Technology (hereinafter referred to as "Bingling Tech") for "infringement of technical secrets and unfair competition."
Wall Street News reached out to Bingling Tech for a comment but received no response. Both Tesla and Xiaomi declined to comment on the lawsuit.
In comparison to Tesla, Bingling Tech is relatively small. As a startup founded just over a year ago, its orders last year totaled only 15 million yuan. However, Bingling Tech holds a unique position as a company within Xiaomi's automotive ecosystem.
It appears that Tesla is feeling threatened by Xiaomi and is now targeting companies within Xiaomi's automotive supply chain.
Bingling Tech specializes in automotive current sensors, a critical component for the energy efficiency and safety management of electric vehicles. Currently, this sector is dominated by foreign brands like LEM and Honeywell, with few domestic manufacturers capable of mass-producing automotive-grade current sensors.
Some industry insiders believe that Tesla's lawsuit against Bingling Tech might be related to the background of the company's senior executives. Its founder previously held a key position at Sensata, a supplier to Tesla.
Bingling Tech's founder, Jia Yongping, was responsible for Sensata's electrification business in the Greater China and India markets. This business division directly oversaw the research, development, and market operations of new energy vehicle products like pressure sensors, motor rotor position sensors, fuses, and high-voltage DC contactors. Sensata is the exclusive supplier of high-voltage main circuit and fast-charging system DC contactors for Tesla.
Whether Bingling Tech's technological approach closely mirrors that of Tesla's suppliers, leading to the dispute, remains to be seen in court. Some industry insiders believe that Bingling Tech is just a reserve in Xiaomi's supply chain and can be replaced if necessary.
Bingling Tech is one of many automotive supply chain companies invested in by Lei Jun. In March of this year, Xiaomi's manufacturing investment fund acquired a stake in the company for 389,000 yuan, holding about 11.86% of its shares. Another investor entering at the same time was the Peak Evergreen Fund, which focuses on early-stage investments in technology and consumer sectors. Both investors are now the second-largest shareholders of Bingling Tech, following founder Jia Yongping, who holds 46.3%.
The actual controller of Xiaomi's manufacturing investment fund is Lei Jun. Although it was established just two years ago, the fund has already completed two rounds of fundraising, raising a total of 9.03 billion yuan. The fund has been actively investing in sectors like integrated circuits, lithium batteries, and automobiles.
Data from Qichacha shows that since Xiaomi officially announced its car-making venture in March 2021, Xiaomi-related companies, including the manufacturing investment fund, have made over 50 investments in the automotive sector, covering all aspects of car manufacturing.
Industry insiders told Wall Street News that Lei Jun aims to replicate Xiaomi's strategy in smartphones and IoT by investing around the automotive ecosystem to realize his ambitions in car manufacturing. Previously, Xiaomi invested in companies like Purple Rice, Huami, and Stone Technology, which not only strengthened Xiaomi's control over the supply chain but also yielded significant investment returns.
Lei Jun has big ambitions for car manufacturing. He aims to be among the "top five in the automotive industry," targeting annual shipments of over 10 million cars. This aligns with Tesla's goal of achieving global annual sales of 20 million vehicles, suggesting that the two giants are set to compete directly in specific market segments.
Xiaomi's car-making progress has been smooth. Lu Weibing stated that Xiaomi's car-making progress has been very successful, even exceeding some recent expectations. Xiaomi's car testing this summer went smoothly, and the plan to start mass production in 2024 remains unchanged.
While Tesla's legal move against a company within Xiaomi's automotive ecosystem might not be devastating, it does reflect an intensifying competitive atmosphere. People are curious whether Xiaomi, which also aims to disrupt the automotive market with smart driving technology, poses a subtle threat to Elon Musk.
Whether Xiaomi's automotive venture, once it officially launches next year, can disrupt the industry remains to be seen. What's clear is that the competition within the industry is intensifying, and no player is willing to give an inch.
The future market will only become more cutthroat. As the saying goes, "To the victor go the spoils," and the automotive industry's major reshuffling has just begun.
