Xiaomi Corp has acquired a plot of land in Beijing for 842 million yuan ($116 million) to expand its electric vehicle (EV) production.

This move comes after the early success of its debut sedan, signaling CEO Lei Jun’s $10 billion plan to establish a strong presence in the EV sector. Chinese EV stocks XPeng Inc (NYSE:XPEV) and Li Auto Inc (NASDAQ:LI) are trading lower on Monday.

The 53-hectare site is near Xiaomi’s existing EV factory in the Yizhuang district, Bloomberg reports.

According to Beijing Municipal Commission of Planning and Natural Resources filings, the land purchased by Xiaomi subsidiary Xiaomi Jingxi Technology will help in the “development of the high-end automobile and new energy intelligent vehicle industry.”

Traditionally known for its smartphones, the firm intends to start producing and selling a sport utility vehicle akin to Tesla Inc (NASDAQ:TSLA) ‘s Model Y by 2025.

Earlier this month, Lei Jun announced that Xiaomi is on track to meet its initial 2024 sales goal of 100,000 vehicles by November.

Phase two of Xiaomi’s car factory, which will have an annual production capacity of 150,000 cars, is expected to be completed by 2025.

Recent reports indicated China’s plans to expand its stimulus program by approximately 300 billion yuan ($41.5 billion) to subsidize purchases of passenger vehicles and consumer electronics after weak second-quarter GDP growth.

Xpeng stock lost over 59% in the last 12 months, Li Auto lost 56% and Nio 71% as the EV market battled demand softness.

Price Actions: At the last check on Monday, XPEV stock was down 1.06% to $8.42, and LI was down 0.52% to $19.04 premarket.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Company