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… dependent on China, so they've got to get alternative sources."
Japan, with firms such as TDK and Shin-Etsu, ranks a distant second to China in magnet production and depends heavily on Chinese feedstock for heavy rare earths. South Korea's Star Magnetics, Canada's Neo Performance Materials, and Germany's Vacuumschmelze are similarly constrained.
"There's a very limited amount of alternatives to sourcing those magnets from the Chinese market," said David Merriman, of Project Blue.
The new controls also present a major issue for the US Department of Defense. To apply for an export license, suppliers must provide further details of their downstream. The controls concern "dual use" applications, which means it will be "very difficult" to get them for defense purposes, according to Merriman.
"The Department of Defense is going to have to do something dramatic and figure out how they're gonna get dysprosium and terbium," Ormerod added.
Since 2020, the Pentagon has awarded more than USD 439 million to companies to establish domestic rare earth magnet supply chains, including USD 28 million to Noveon and USD 288 million to Lynas to build a heavy rare earth separation facility in Texas. It also provided eVac, a subsidiary of Vacuumschmelze, with USD 94 million to build a magnet plant in South Carolina.
US company MP Materials, which operates the country's only mine for rare earths, has received USD 45 million in Pentagon funds to establish a domestic mine-to-metal-to-magnet supply chain. It plans to produce 1,000 tons of magnets after ramping up late this year for sale to General Motors and other customers.
But MP has <a href="https://asia.nikkei.com/Economy/Trade-war/US-miner-halts-rare-earth-exports-to-China-due-to-tariff-war">halted</a> rare earth shipments to China, its main source of revenue, as a result of the trade war. That comes after a tough 2024 in which revenue dropped 20% to USD 203.9 million and its operating loss ballooned nearly tenfold to USD 169.4 million.
China, in 2023, <a href="https://asia.nikkei.com/Economy/Trade/China-bans-exports-of-rare-earth-magnet-technologies">imposed</a> tight restrictions on exporting processing and magnet-making technology. Its latest controls, if they turn into a ban, would likely further hobble efforts to expand in the West in the short term, said Jon Hykawy, founder of critical minerals consultancy Stormcrow Capital.
"I'd say these new barriers to rare earth trade probably work out quite nicely for China, as it creates additional issues for building a complete supply chain for rare earth magnets in the West," he said.
This article first appeared on <a href="https://asia.nikkei.com/Business/Technology/Tech-Asia/How-China-s-rare-earth-curbs-complicate-West-s-diversification-push">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

How China's rare earth curbs complicate the West's diversification push

China

… transformation.
One journalist, after visiting Hebei, wrote:
<blockquote>“The more responsibility you’re willing to bear, the bigger the mission you’ll be able to carry—and the greater the success you’ll achieve.”</blockquote>
For every local government official now standing beneath China’s banner of tech, industry, innovation, and development, that reflection resonates more powerfully than ever.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3280571847843976">article</a> was written by Guo Yunxiao, Huang Zhuxi, Xu Muxin, and Shi Jiaxiang for 36Kr.
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Beneath the bureaucracy: How state capital made (and remade) China’s venture ecosystem

Venture Capital

Private Equity

Investment

Merger &amp; Acquisition

<h3>Arysun lands USD 575,000 to accelerate solar adoption in Southeast Asia</h3>
Arysun, a Singapore-based climate tech startup, has secured USD 575,000 in pre-seed funding to broaden access to rooftop solar solutions for Southeast Asian households. The round was led by Wavemaker Impact, with participation from the First Move Fund.
The company offers starter kits that are reportedly low-cost and user-friendly, tailored to households in Indonesia. With energy costs rising and demand for sustainable alternatives growing, Arysun is targeting the region’s emerging middle class to fill a market gap.
The funding will be used to expand the team, scale up installations, and develop a digital platform to streamline solar adoption. Arysun also plans to establish partnerships with local installers, suppliers, and financing providers to strengthen its market presence.
Arysun’s long-term goal is to achieve 100 million tons of carbon abatement annually.
<figure id="attachment_152990" aria-describedby="caption-attachment-152990" style="width: 450px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-152990" src="https://console.kr-asia.com/wp-content/uploads/2025/05/Arysun-Aik-Phong-Ng-720x560.jpg" alt="Photo of Aik-Phong Ng, founder and CEO of Arysun." width="450" height="350" srcset="https://console.kr-asia.com/wp-content/uploads/2025/05/Arysun-Aik-Phong-Ng-720x560.jpg 720w, https://console.kr-asia.com/wp-content/uploads/2025/05/Arysun-Aik-Phong-Ng-1024x796.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2025/05/Arysun-Aik-Phong-Ng-768x597.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2025/05/Arysun-Aik-Phong-Ng.jpg 1080w" sizes="(max-width: 450px) 100vw, 450px" /><figcaption id="caption-attachment-152990" class="wp-caption-text">Photo of Aik-Phong Ng, founder and CEO of Arysun. Photo and header photo courtesy of the company.</figcaption></figure>
<h3>Nuevocor raises USD 45 million to advance gene therapy for cardiomyopathy</h3>
Nuevocor, a biotech firm focused on treating cardiomyopathies through mechanobiology, has raised USD 45 million in a Series B funding round co-led by Kurma Partners and Angelini Ventures. The round also saw continued support from EDBI, ClavystBio, Boehringer Ingelheim Venture Fund, Highlight Capital, and Seeds Capital.
Proceeds from the round will fund clinical trials for the company’s lead candidate, NVC-001, a gene therapy developed to treat LMNA-related dilated cardiomyopathy, a severe genetic heart condition. Nuevocor plans to open trial sites across the US and Europe and will establish a clinical office in Paris. The therapy is based on Nuevocor’s proprietary platform and is designed to correct biomechanical dysfunction at the nuclear level.
Beyond its lead asset, Nuevocor is developing a broader pipeline to address other mechanobiology-driven cardiovascular diseases.
whereAdBanner.Uptake
<h3>Recent deals completed in China:</h3>
<ul>
<li aria-level="1"><a href="https://www.lanxinrobotics.com/">Lanxin Robotics</a>, a robotics technology firm, has raised an eight-figure RMB sum in a Series C+ funding round led by Kunpeng Fund. The funds will support advancements in its 3D sensing technology, humanoid robotics, and improvements to its supply chain and service infrastructure. —<a href="https://36kr.com/p/3281993571443331">36Kr</a></li>
<li aria-level="1">Xingkeyuan, an advanced materials startup, has secured an eight-figure RMB sum in an angel plus round backed by Oriza Seed. Existing investors include HongShan’s seed fund, K2VC, KylinHall Partners, the Shuimu Tsinghua Alumni Seed Fund, and Six Sigma Capital. The funds will be used for product development and scaling manufacturing capabilities. —<a href="https://36kr.com/p/3283422131856264">36Kr</a></li>
<li aria-level="1"><a href="https://rino.ai/">Rino.ai</a>, an autonomous driving company, has raised RMB 200 million (USD 28 million) in a Series B round led by SF Express, with support from Shineray Motors and returning investor Linear Capital. The funding will fuel the development of new unmanned vehicle products and support market expansion for existing models. —<a href="https://36kr.com/p/3282350631478151">36Kr</a></li>
<li aria-level="1"><a href="http://ulsrobotics.com/en/">ULS Robotics</a>, an exoskeleton technology platform, has raised an eight-figure RMB sum in a Series B round led by BeFor Capital, with follow-on investment from Guoyi Capital. This round follows a Series A+ raise in July 2024 led by Dunhong Capital. The new capital will support mass production of consumer-grade exoskeletons and further integration of exoskeleton hardware with artificial intelligence. —<a href="https://36kr.com/p/3282315635336068">36Kr</a></li>
<li aria-level="1"><a href="https://www.gz-ichip.com/">Silicon Extreme</a>, a Hefei-based quantum computing startup, has secured a multi-million RMB investment (USD 1.4–2.8 million) from Vertex Ventures China, with Index Capital serving as financial advisor. The funding will support R&amp;D for integrated photonic quantum chips and general-purpose quantum computing systems. Another funding round is currently in progress. Founded in 2020, the company collaborates with leading Chinese universities to commercialize quantum chip technologies. —<a href="https://36kr.com/p/3272037283192964">36Kr</a></li>
</ul>
whereRelatedArticle
<h3>Neufast, Co-Axis, Krenovator, and more made recent headlines:</h3>
<ul>
<li aria-level="1">Neufast, a Singapore-headquartered startup, landed USD 1.1 million in a pre-Series A funding round led by Wavemaker Ventures, with additional capital from Wings Capital Ventures.</li>
<li aria-level="1">Co-Axis, a digital marketplace for impact investments, raised SGD 1.25 million (USD 966,130) in catalytic capital from the Richardson Family and Catalytic Capital for Climate and Health (C3H), a Temasek Trust initiative.</li>
<li aria-level="1">Krenovator, a Malaysia-based tech talent platform, closed an undisclosed seed funding round led by Ignite Asia.</li>
</ul>
If there are any news or updates you'd like us to feature, get in touch with us at: <a href="mailto:hello@kr-asia.com">hello@kr-asia.com</a>.
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Deals in brief: Wavemaker Impact leads Arysun’s pre-seed round, Nuevocor raises USD 45 million, latest funding deals in China, and more

Singapore

Southeast Asia

Southeast Asia's venture capital associations have released guidelines to set regional governance benchmarks for startups as they begin to address rising concerns of poor professionalism in the tech industry.
The collaboration of leading private capital groups from Singapore, Indonesia, Thailand, Vietnam, and Malaysia has resulted in the launch of a document titled "Maturation Map: Corporate Governance in Southeast Asia Private Markets."
"This foundational document sets a shared benchmark for startup governance, aiming to future-proof the region's innovation economy and build the trust for long-term capital formation and public market readiness," the associations wrote in a statement released on April 24.
Singapore Venture and Private Capital Association (SVCA) vice chairman Shane Chesson, noted that Southeast Asia's private investment landscape is "still young and learning."
"The 'Maturation Map' … is a sign of the collective will and approach we can take to improving governance for better investment returns," he said.
The SVCA is set to summarize the document into an industrywide playbook for discussion with startup founders and board members.
The document will act as a guide and also reflect the collective voice of venture and growth investors, founders, board members, regulators, advisers, and legal experts.
"It is designed to strengthen governance from pre-revenue startups to IPO-ready companies—supporting sustainable innovation, scaling, and successful exits," the statement said.
Regional investment firms, legal experts, and governance advisers were involved in designing the guidelines. "The result is a comprehensive, practical framework aimed at reducing governance failures, encouraging active diligence, and preparing high-potential startups for successful exits via IPO or merger and acquisition," according to the statement.
The associations acknowledged they were partly motivated by high-profile governance breaches, including financial mismanagement and fraud in Singapore, Indonesia, Vietnam, and the Philippines. "These incidents have highlighted the urgent need for proactive, stakeholder-led governance practices, especially in private markets where regulatory oversight is limited."
In Indonesia, aquaculture technology company eFishery was recently accused of financial fraud. Preliminary findings from a forensic audit revealed that eFishery's founders and top executives had inflated the startup's revenue nearly fivefold between January and September 2023 and manipulated earnings figures to make it appear profitable despite incurring massive losses.
Other findings include alleged mismanagement and financial embezzlement at edtech startup Skola in Vietnam and Philippine-based fintech firm PayMongo. Local police are investigating both cases.
The guidelines set out proposed action for active due diligence, emphasizing that investment practices should be continually reviewed and improved. "This ensures that companies meet increasingly stringent criteria as they mature and are better positioned to navigate future challenges," the document noted.
The guidelines also encourage artificial intelligence-driven governance solutions to detect financial anomalies, automate reporting, and improve real-time oversight. "This technological integration can enhance accuracy and timeliness in monitoring corporate activities and raise [the] difficulty of executing fraudulent acts," the document stated.
In its final section, the guidelines recommend enhancing the adviser ecosystem, along with stronger governance frameworks for supervision and enforcement. "Prioritizing enforcement of shareholders' rights and exploring legal avenues to address breaches … underscore the importance of accountability and deterrence."
The association refers to the guidelines as a living document, which will be updated regularly based on feedback, changing market conditions, and ongoing dialogue.
"The 'Maturation Map' helps set that direction for Southeast Asia, and we support the call for stronger follow-up measures like regular audits, board training, and ESG tracking to raise the bar together," said Ng Sai Kit, the chairman of the Malaysian Venture Capital &amp; Private Equity Association (MVCA).
This article first appeared on <a href="https://asia.nikkei.com/Business/Startups/Southeast-Asian-VCs-move-to-set-startup-governance-standards">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

Southeast Asian VCs move to set startup governance standards

Malaysia

Thailand

Vietnam

Indonesia

… key electronics suppliers were heavily controlled by Wall Street investors—because tariffs could crush profits, prompting US companies to abruptly exit certain markets.
Whenever cost savings tempted firms to use US-made components, they also developed parallel localized or backup supply options.
For example, many automakers still use TI chips because they are mature, non-core power management chips with highly competitive prices. But should tariffs significantly raise costs, switching would pose no technical hurdle.
Similarly, Gentex, a major US supplier of automotive mirrors, remains attractive because of cost. However, if tariffs make Gentex parts too expensive, Chinese automakers could quickly pivot to domestic alternatives.
Nio insiders shared with 36Kr that its rapid shift from Wolfspeed to an alternative was only possible because validation of backup options commenced as early as two years ago. This risk awareness isn't limited to the supply chain—it’s embedded in Chinese carmakers' global market strategies.
Brands like Nio and Li Auto see the US as a key market alongside China and Europe. Early user surveys showed strong potential appeal in the US. Li Auto even explored setting up a factory in Mexico but ultimately abandoned the plan due to policy unpredictability, avoiding what seemed like a risky investment.
Sure enough, in September 2024, the Biden administration slapped an additional 100% tariff on Chinese EVs.
<h3>Supply chains can survive—but not thrive—on independence</h3>
China’s conservative strategy helped its automakers weather the tariff tsunami. For foreign brands, the same tariffs have undercut years of localization work.
Tesla is now scrambling to shift production to Southeast Asia. However, within the automotive industry, it is common knowledge that the region's weak electricity infrastructure poses a major bottleneck for heavy manufacturing.
An executive at a German automotive parts company shared that a colleague from India marveled at how power outages were virtually nonexistent in China during a visit there.
Another battery industry insider revealed that at his company’s Thailand plant, energy-intensive equipment like large ovens could barely operate during daytime hours, making continuous production impossible.
Despite these constraints, once supply chain diversification begins, it becomes difficult to stop. Following the US government’s tariff hikes, German firms in China have also been advised to relocate production to Eastern Europe.
An executive at a German fastener company said its US branch stockpiled Chinese-made inventory after Trump's reelection, but supplies are running low.
He expressed deep skepticism about US manufacturing: "First, you can't hire enough workers. Second, quality control is worse than China. Third, prices are much higher." Still, if the tariff war drags on, options may narrow to either manufacturing in the US or raising prices year after year.
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For luxury carmakers like BMW and Mercedes-Benz, closing off supply chains also stifles innovation.
Both brands continue to import key electronic components from the US and Europe, especially critical safety sensors for speed, steering, and component status.
BMW engineers told 36Kr that Chinese employees are rarely involved in developing or testing these parts. Even for localized production, suppliers liaise directly with German R&amp;D teams.
Mercedes-Benz added that while basic materials, molds, and testing standards can be localized easily, replicating the intricate manufacturing processes behind electronics remains difficult.
For critical components like airbags—designed to save lives in an instant—luxury automakers still prefer US and European suppliers, despite China's manufacturing strength.
On April 23, signals of a potential softening in the US tariff stance emerged. But for the automotive supply chain, vigilance remains paramount.
"When planning global operations, we don't just look at the next one to two years," said an executive at a leading parts company. "We plan five to ten years ahead—or longer."
Regional supply chain independence is fast becoming the norm. For some European luxury brands, producing in China for China and in the US for the US is now standard strategy.
The broader question is whether full decoupling in such an interdependent space sends a warning for global trade. If even the automotive industry can be split down geopolitical lines, what comes next?
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3124633172858887">article</a> was written by Xu Caiyu for 36Kr.

Trump’s new tariffs rattle supply chains, but China’s EV firms aren’t blinking

Transportation

Electric Vehicles

Mobility

… <a href="https://36kr.com/p/3181743545750407">article</a> was written by Huang Nan for 36Kr.

Can a smart grill from China earn a place in American backyards?

Retail

Consumer Economy

… focuses on semiconductor-grade metals and compounds. Its materials serve a range of sectors including electric vehicles, aerospace, medical diagnostics, and infrared chip manufacturing. Zhongwei expects to raise a larger Series A round next year. —<a href="https://36kr.com/p/3280581284208772">36Kr</a></li>
<li aria-level="1"><a href="https://www.qj-robots.com/">Qianjue Technology</a>, an embodied intelligence company, has raised an eight-figure RMB sum in its latest funding round. Oriza Seed led the investment, with participation from Gobi China and Langcheng Capital. The funding will go toward product development, R&amp;D, and accelerating mass production. Founded in May 2024, Qianjue specializes in tactile sensing and multimodal manipulation technology for precision robotics. Its offerings include high-resolution multimodal tactile sensors and intelligent modules for perception and control. —<a href="https://36kr.com/p/3231110308478083">36Kr</a></li>
</ul>
whereRelatedArticle
<h3>Flash Coffee, Secai Marche, Manus, and more made recent headlines:</h3>
<ul>
<li aria-level="1">Flash Coffee, a coffee chain based in Indonesia, raised USD 3 million in an additional round of funding led by TA Ventures, with returning investor White Star Capital also participating.</li>
<li aria-level="1">Secai Marche, a Tokyo-based logistics and supply chain company, reportedly received a USD 4 million grant. The funding was awarded by Japan’s Ministry of Economy, Trade and Industry (METI) under its “Global South Future-oriented Co-creation Project.”</li>
<li aria-level="1">Butterfly Effect, the Chinese startup behind the agentic AI platform <a href="https://kr-asia.com/5-things-to-know-about-manus-the-ai-agent-everyones-debating">Manus</a>, raised USD 75 million in a funding round led by venture firm Benchmark, according to media reports. The round also included follow-on investments from Tencent, ZhenFund, and HongShan.</li>
</ul>
If there are any news or updates you'd like us to feature, get in touch with us at: <a href="mailto:hello@kr-asia.com">hello@kr-asia.com</a>.
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Deals in brief: DailyCo acquires Waku to grow in Indonesia, Neufast raises pre-Series A funding, latest China investments, and more

New Zealand

Oceania

Ecovacs Robotics recently released its earnings for fiscal year 2024 and the first quarter of 2025. The company reported record-high revenue, yet rising costs continued to weigh on margins. Roborock, its closest competitor, followed a similar pattern: surging sales with shrinking profit.
According to its latest financials, Ecovacs generated RMB 16.54 billion (USD 2.3 billion) in 2024 revenue, a 6.71% year-on-year (YoY) increase and an all-time high. Net profit attributable to shareholders rose 31.7% to RMB 806 million (USD 112.8 million). In Q1 2025, revenue climbed to RMB 3.86 billion (USD 540.4 million), up 11.06%, while net profit surged 59.43% to RMB 475 million (USD 66.5 million).
These numbers mark a turnaround after two years of decline. In 2023, Ecovacs saw profits fall 60%. Still, 2024 profits remain well below the company’s 2021 peak, when it earned RMB 2.01 billion (USD 281.4 million) on RMB 13.09 billion (USD 1.8 billion) in revenue—yielding a 15.39% net margin. By contrast, 2024’s higher revenue came with less than half the profit and only a third of the margin.
Roborock, meanwhile, posted 2024 revenue of RMB 11.95 billion (USD 1.67 billion), up 38.03% YoY. But net profit dipped 3.64%. Despite the decline, Roborock still delivered twice the net profit of Ecovacs. In Q1 2025, Roborock’s revenue jumped 86.22% to RMB 3.43 billion (USD 480.2 million), while net profit fell 32.92% to RMB 267 million (USD 37.4 million).
The shifting market dynamics are stark. According to IDC, Roborock shipped 3.3 million units in 2024, surpassing longtime leaders iRobot and Ecovacs for the first time.
The robot vacuum segment has transitioned from rapid growth to saturation and widespread product homogeneity. For Chinese brands, overseas markets have become the next frontier. But expansion is proving expensive.
Among top-tier players, Ecovacs has the longest global track record. In 2024, it generated RMB 7.11 billion (USD 995.4 million) from international markets. Europe stood out: Ecovacs and its sub-brand Tineco saw revenue growth of 51.6% and 64%, respectively.
At home, Ecovacs built a robust sales infrastructure early, dominating malls and appliance stores with distributor and self-operated channels. It is now replicating that model abroad. Unlike peers that rely heavily on third-party distributors, Ecovacs established its European headquarters in Germany in 2012 and now runs a local team of nearly 50. This setup gives it tighter brand control and supports its push into premium segments.
Niche categories are also gaining traction. International revenue from Ecovacs’ window-cleaning robots jumped 214.8%, while lawn-mowing robots nearly doubled.
Roborock’s global strategy is just as aggressive. In 2024, 53.48% of its revenue came from international sales. The company initially leaned into e-commerce, building its US presence via Amazon and its own channels. That digital-first strategy helped it grow quickly.
But Roborock is now expanding offline. It has a US subsidiary and an independent after-sales service network. Its products are available in over 1,400 physical stores, including Best Buy, Walmart, and Sam’s Club.
Despite these efforts, both brands are facing similar hurdles. Logistics, warehousing, and local operations have pushed up costs. Investments into marketing and R&amp;D—particularly in adjacent product lines like lawn and window-cleaning robots—have further strained margins.
With core vacuum tech hitting maturity, brands are chasing the next frontier. Roborock made headlines at CES 2025 with its G30 Space, featuring a five-axis bionic arm that can pick up and store objects, turning the vacuum into a more interactive cleaning assistant.
But not all players are convinced. Neither Ecovacs nor Narwal has released an arm-equipped model. Mechanical arms introduce complexity, higher repair costs, and practical limitations—such as reduced ability to clean under furniture or avoid collisions. For now, the robotic arm feels more like a novelty than a necessity.
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Instead, both companies are diversifying, albeit in different directions.
Ecovacs is building adjacent hardware categories that share underlying technologies. It is investing in window and lawn robots, and its Tineco brand is entering smart kitchen appliances and water purifiers.
Roborock is eyeing large appliances. In 2024, it launched its first washer-dryer combo, followed by a molecular sieve model and a mini version, priced between RMB 2,000–3,000 (USD 280–420). It has built a dedicated overseas team for its laundry line and plans to release washer-dryer sets, standard washing machines, and compact models for small spaces.
Neither has cracked the large appliance market yet, but both see room to experiment—especially in overseas markets where white space remains.
One looming threat could derail these strategies: tariffs.
Ongoing US trade policies have disrupted global supply chains, driving up export costs and squeezing margins. Higher retail prices may erode the core advantage Chinese brands enjoy overseas—affordability.
Some players are adapting. Ecovacs is scaling overseas manufacturing. Roborock is strengthening partnerships with local distributors to share costs. But tariffs remain a structural risk. If left unresolved, they could force Chinese hardware firms to rethink global supply chains entirely—and rework long-term international strategies.
For now, both Ecovacs and Roborock are pressing ahead. But as their margins shrink and global ambitions expand, the challenge will be to grow without sacrificing profitability—a balance that may define the next chapter of China’s smart hardware playbook.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3271134528987524">article</a> was written by Huang Nan for 36Kr.

Record sales, shrinking profits: China’s robot vacuum leaders face their next test

Deep Tech

<a href="/company/xiaomi">Xiaomi</a> is edging into Europe’s electric vehicle landscape with deliberate subtlety. The Chinese tech giant has quietly set up an automotive R&amp;D center in Munich, Germany—its first such facility in the region. According to 36Kr, the site currently hosts fewer than 50 staff, mostly senior managers and technical specialists.
Sources familiar with the matter say the team is not hiring aggressively. Instead, the Munich operation is positioned as a compact, elite unit. One of its headline projects: pushing the limits of the Nurburgring edition of the Xiaomi SU7 Ultra. The group is also tasked with refining performance across Xiaomi’s broader EV pipeline.
But Xiaomi’s ambitions extend beyond the test track. In December 2024, the company’s international division created a dedicated task force to study global EV sales. The team began recruiting for roles in market research and operational planning—early signals that Xiaomi is considering pilot launches in Germany, France, and Spain.
At the same time, Xiaomi is exploring whether to establish a design studio in Europe to tap the region’s rich automotive talent pool.
When contacted by 36Kr, Xiaomi confirmed the existence of its Munich R&amp;D center but said there is no formal sales network in place for the region.
Still, the Munich site is about more than technical experiments—it’s a foothold for brand differentiation. While traditional automakers like Mercedes-Benz, BMW, and Porsche are focused on developing autonomous driving and smart cockpit tech, Xiaomi is taking a different route: returning to the fundamentals of high-performance driving.
Several members of Xiaomi’s Munich team have already been named in European press reports. The group is led by Rudolf Dittrich, formerly BMW’s head of limited edition vehicles. Other key hires include Jannis Hellwig, previously with BMW’s Formula E team, and Ricard Aiguabella Macau, an aerodynamics expert from Ferrari’s Formula 1 division.
“They are chasing a Nurburgring lap time that rivals what McLaren pulled off at Shanghai,” one source told 36Kr. “Track performance is the benchmark here.”
The Nurburgring edition of the SU7 Ultra, priced at RMB 814,900 (USD 114,086), was announced by Xiaomi founder Lei Jun during the car’s launch event. An optional track package, costing RMB 100,000 (USD 14,000), includes a suite of component upgrades.
“This version is designed to outpace Porsche. Many parts were selected without regard for cost,” said one industry insider. “But it's still far from being both faster than Porsche and ready for volume delivery in China. That’s why Xiaomi has brought in so many motorsport veterans.”
For Xiaomi, the track is a crucible. Cars engineered to perform under extreme conditions—speed, temperature, wear—often become proving grounds for innovations that can eventually be scaled to consumer vehicles. The Munich center reflects this playbook: push performance limits first, then filter learnings into the mass market.
That strategy already seems to be working. The SU7 Ultra’s headline lap times have helped anchor Xiaomi’s image as a serious player in high-performance EVs.
Consumers, too, respond to pedigree. EV buyers are more likely to trust digital features if they’re born from racing applications. Xiaomi is hoping that this trust translates into a premium halo effect across its product line.
Lei Jun has said publicly that Xiaomi wants to start selling its EVs in Europe before 2030. Sources told 36Kr that the company’s overseas task force is already operating out of Dusseldorf, with a focus on mapping market conditions in Germany, Spain, and France.
Compared to other Chinese EV makers, Xiaomi may have a head start. Even before it launched its automotive unit, more than half of Xiaomi’s group revenue came from international markets. The brand once claimed an 18% share of Europe’s smartphone market, ranking third behind Samsung and Apple.
This recognition gives Xiaomi a valuable beachhead as it ventures into Europe’s EV scene.
The timing could also work in Xiaomi’s favor. BMW’s M series hasn’t yet debuted a full EV, save for camouflaged test units of a rumored iM3. Mercedes-Benz’s EQE AMG launched in 2023 but carries a six-figure EUR price tag that limits its reach.
By contrast, Xiaomi is positioning its vehicles with a mix of track performance, sharper pricing, and superior digital systems. That combo could resonate with a segment of European buyers left cold by traditional brands’ offerings.
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Still, challenges loom. While Xiaomi has carved a niche in China’s premium segment, its automotive brand remains relatively untested abroad. The SU7 starts at over RMB 200,000 (USD 28,000) domestically, and the SU7 Ultra climbs past RMB 500,000 (USD 70,000)—pricing that could balloon further once exported.
And there’s the matter of manufacturing. “There’s no sign yet that Xiaomi plans to localize production in Europe,” one observer told 36Kr. “For now, the focus is still on gauging market response.”
From engineers at Nurburgring to market researchers in Dusseldorf, Xiaomi is methodically building the pillars of an overseas EV strategy. But whether that strategy yields a globally respected brand—or stalls short of it—remains to be seen.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3180192461476483">article</a> was written by Xu Caiyu for 36Kr.

Is Xiaomi’s new EV base in Germany a prelude to its European rollout?

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