Chinese smartphone giant Xiaomi Corporation has suffered continued delays in getting government approval for its US$10bn electric vehicle (EV) project, raising concerns it was falling far behind rival startups which already had a growing presence in the fast expanding local EV market.

Media reports, citing “people close to the matter”, said the Beijing-based company had been in talks with the National Development and Reform Commission (NRDC) for months to get the required licences but without success.

Xiaomi EV Company was established last September when it began the EV application process. The company currently employs 1,000 people.

Domestic startup rivals such as Nio, Li Auto and Xpeng are already building momentum in the EV sector with Nio also leading the way in establishing a battery swapping network in China.

The government has stepped up scrutiny of the EV sector in recent months with new applicants asked to submit extensive documentation to prove their technology capability and financial stability.

Billionaire Xiaomi co-founder Lei Jun hoped the company’s expertise in connected technology and in building loyal user communities would give it a strong footing in the Chinese EV market which was expected to exceed five million units this year. He had indicated Xiaomi EV Company would be his final start-up endeavour.

Xiaomi executives remained hopeful the regulator would eventually approve the EV project but feared further significant delays would affect the company’s first product launch currently scheduled for 2024.