China’s Xiaomi Corporation said it had incorporated its electric vehicle (EV) division as it wants to develop a significant presence in the main growth segment of the automotive market.

The Beijing-based smartphone giant announced the division, which currently employs around 300 people, had been incorporated with a registered capital of CNY10bn (US$1.55bn), saying it had entered a “substantial development phase”.

Xiaomi had previously stated it wanted to hire 500 engineers initially to drive forward its EV project and had held talks with a number of automakers and local governments on establishing potential partnerships.

In August, Xiaomi announced the acquisition of local autonomous driving and imaging technology company Deepmotion for US$77m which would help strengthen its technology base in the smart EV segment.

Xiaomi confirmed it was mainly interested in Deepmotion’s autonomous driving and driver assist software development division, as it wanted to develop Level 4 self-driving capabilities as a first step.

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President Wang Xiang said in a statement: “Through this acquisition, we hope to shorten the time to market for our products. We want to speed up our autonomous driving research and development.”

Last month Xiaomi was reported to have held talks to acquire a stake in China Evergrande New Energy Vehicle Group, a subsidiary of property company China Evergrande Group, as well as with Black Sesame Technologies, a startup that develops artificial intelligence chips and systems for vehicles.

Xiaomi’s CEO Lei Jun said the company had cash reserves of CNY108bn at the end of 2020, meaning it could afford to take on the risks involved in its entry into the smart EV business which it announced in March.

Lei Jun was reported to have already invested in Chinese EV startups Nio Inc and Xpeng Motors through venture capital firm Shunwei Capital.